We don't know how the TE servers work, for example why some servers have max LV 78 and some others 58.
Merging the servers would be good as if one team reach -2LV from the top, is doomed to play vs 150% quality opponents in CL.
Promoting teams from first levels won't help that.
So I think a better solution is to play free of quality level in CL and Cup (as it happening in auctions, asso tournaments, asso friendlies).