Firstly, most certainly this is the way to go. Pull income in line with FA performance as closely and immediately as possible. Isn't this what everyone has been clamouring for when saying "give us something to play for?"
I'm 100% with you here, Ov. Exciting times, and I think this is definitely the right direction.
A couple of thoughts...
Promotion / Relegation
You talk about a larger relegation zone at the top, or indeed larger relegation zones in general. I think this is essential, but if we're going to stay with a linear league structure this would also mean a larger promotion zone.
If you're relegating 6 managers from a division then you're also promoting 6 managers from the division below. This only leaves 8 managers to stay on for next season in all but the top division.
I don't know whether this should be considered a bad thing necessarily, but personally I prefer a little more stability in my division, so rivalries can be developed and so that promoting feels a little more like an accomplishment.
Trainspotter made a good point earlier...
I think he's right. The shallow structure appears to offer much more of the volatility that will really make this system mean something, but then deep FAs offer a much better environment for new clubs to be matched against opponents of an equal calibre.
An elegant solution to this, in my opinion, is the Pyramid League structure. If we have a structure of 1 Premier League, 2 First Divisions, 4 Second Divisions etc, you get;
a) 6 relegated clubs but only 3 promoted clubs in each of the lower divisions
b) A league structure that is shallow enough in terms of movement between divisions that a new club does not have a mountain to climb, and also provides real consequences for relegated clubs (eg. using your example figures, a change in the decrease of top prize money possible from $5.6mil -> $4.7mil to $5.6mil -> $3.88mil)
c) A league structure that is deep enough in terms of population that a new club is much more likely to be greated in their opening season by a group of 20 managers that range in reputation from 1* to 6* (say) instead of 1* to 12*.
Promotion Bonus
I don't know if this is just an error in your example model, but it seems that the top prize money from a lower division outstrips the lowest prize money of the division above in every instance except... the top division? Not sure why we'd want to offer the clubs at the top, who likely need the most shaking up, a little step up in finances here?
I'll assume that's just an anomaly and move on. In my opinion
all the divisions should have higher prize money awarded for the promoted clubs than that received by the clubs relegated from the division above.
Finishing 3rd in Division 1 and promoting is a better result than finishing 18th in the Premiership and falling isn't it?
You'll certainly be better placed in the season that follows your prize money allocation... If the relegated club gets more prize money than you do, and is competative with your team on most levels (you'd have to hope to at least be competative with last season's losers when you promote), shouldn't it be you who is receiving the greater reward for your achievement? Especially if we want a potential slippery slope of management challenges to confront the underperforming relegated team...
Stadiums and Money Sinks
One thing, though not directly related to the proposed changes, that I think particularly provides a divide between rich established clubs and their poorer up and coming counterparts is established clubs reaching a point where the stadium ceases to act as a money sink.
Even at what I think is a
very conservative cost of $50k per day for stadium building ($1.4mil for the season, a corporate box and not much else), this cost already makes the gap much larger than it appears in the numbers presented.
My suggestion here would be to increase stadium income but also increase maintenance costs by the same amount. This obviously has no effect on anyone with a stadium that's got 100% attendance every match, but potentially becomes a significant cost to any team that finds themselves with a stadium that's half empty.
This achieves a number of things...
Firstly, it increases the potential impact of underperformance for an established side and makes the stadium far less of a 'build & forget' mechanic.
So at the moment (the actual numbers aren't important, but to illustrate) max stadium income of $200k would be replaced with, say, max stadium income of $300k but increased maintenace costs of $100k to go with it. So now when the club cops a reputation hit for underperformance and attendance drops to only half what they were previously getting, instead of income dropping from $200k to ($200/2)=$100k we'd be looking at income dropping from $200k ($300k-$100 maintenance) to ($300k/2
less $100k maintenance)=$50k, equal to the minimum stadium income.
This is likely to have a significant impact on the club, and creates a dilemna for the manager...
-Does he downsize the stadium to match what he can realistically fill, throwing some time and money spent down the drain (though potentially being compensated somewhat with a small percentage of the build cost reimbursed)?
-Does he work through with the decreased budget, hoping the club will quickly return to it's former glory but knowing that the gamble is actually acting against his chances of doing just this?
-Does he skimp on the maintenance during these lean times and maximise his chances of regaining his reputation by freeing up money for wages, but knowing that the longer he refuses to pay the cleaners the worse state the stadium gets into, the less income it brings in, the less money he might get when he inevitably has to give in and start selling stands?
I think the idea has merit (obviously

)...
-It provides a larger slippery slope of doom for highflying underachievers while still allowing for good prize money to other clubs at the same level (ie. the drop from Premier to Championship is a bigger financial blow to the relegated club without having to make the actual prize money gap between the two divisions any larger).
-It provides some interesting managerial risk/reward challenges for the out of form top club.
-It reintroduces a potential money sink to clubs who've already finished their stadium. As it stands presently, we have a great money sink dynamic that affects all except the most established clubs which essentially only gives a much stronger position from which to build upon the wealth they already have.
-It reinvigorates the whole stadium arena (pun), introducing some real decision making into stadium building. It becomes less of just 'build it as big as you can realistically expect to fill in the medium term and do that as soon as you're able to'.
That Dividend Thing, or Taxes
Ov, I reckon you should seriously consider something like you're suggesting (or, if not suggesting, bringing to light).
Rich successful clubs whose income outstretches the costs required to maintain their dominance is the one thing that will render this system ineffective. If a dominant club is allowed to amass large reserves of money in the bank they will potentially become too hard to shake from their top spot and the temporary slips in form (which will be the only possible opening, given they are dominant) will not sufficiently affect them due to their big fat safety net of a wallet.
Don't be worried about the rich clubs not liking it. They have plenty to like already (for example, their dominance and the rewards that go with it

). It's the poor clubs we need to worry about liking it the most. They're the ones who get frustrated and leave.
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