If not, my suggestions stand as above.
To that 3rd point I may do some suggestions. Each comes with it´s advantages and disadvantages:

1. A team strength modifier like a +3 per team level when determining cup team strength.
2. Completely open the transfer market regardless of team level to have it balanced through cash for transfers and salaries. This would feel more realistic and "managing".
3. Make the transfer market cap something like: your average team level +5.
4. Let the cup be played by teams level 1-3, 4-6, 7-9 etc. This would give players a feeling of progression: You get better, advance to a new league level, you will more likely win a cup. Within that range, make cup draw random. Just as it really is.
5. In a variation of this, have cup draw cap between +2 and -2 of your own league level. Again with random draw within that range.

Opinions are welcome.