This is actually different from what I saw when tested. I had teams over a year back which were 4 star teams and with varying amounts of out of contract players and the draw matched almost exactly the Q of the top 14 players whether signed or not. I used the same method back when there were discussions around the quality of the league draws. Indeed, when I manipulated, after many seasons of going out in the P or Q rounds or having to Def c-a my way to a showdown with an 8* average team, I used this out of contract factor. ie If the Cups got too boring, I'd leave some of my main players unsigned so that those 11x 6 or 7* players would still count (whether signed or not) but the Three Stooges would be bumped from the top 14 by the incoming retirement age players. That way I could have another go at a normal unfair (to me) cup and still have the option of an 'unfair to them' Cup.
But perhaps it was just a partial implementation of the above. Anyhoooooooo.....
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...............................No matter what you do with multi-level Cups you cant stop players manipulating their Q down to lower the range of higher level teams nor stop higher level players using a 'once in several seasons' higher quality market access blitz.
No back tracking of Q or any sort of adjustment can stop it because people will manipulate it in advance to gain an advantage and others manipulate it in response to try to level it. After all, people tank for several seasons to build a team to dominate so why wouldn't they plan seasons ahead for Cup too.
....except of if you have a single level cup.
What you want is a Cup where teams appear to be the same level and which encompasses the whole range of quality from minnows to superstars. Sounds familiar.
In other words use the same mechanic as Associations where its based on '%age' Q rather than actual Q. Then spread the Q evenly across the Cups. Every Cup has big and little teams in equal measure. Seeding could be used to but that could raise opportunities for manipulating again. l)
I mean, if I have a 7* team and get drawn v a 4* or 9* team then I at least know that it reflects the level of investment/management compared to mine and not Market level. Market access is the real unfairness.
Btw Moi, was it you that put me up against an 8* team with 9* striker in my first Association match? (Seem, no matter what there will be moans)