Having a Youth Team will not be competitive at all, not even for new managers.
A promotion/relegation depends on the A-teams performance, not the Youth Team in your suggestion.
It's purely a way of training another 3-6 players up till the age of 21, without having to sacrifice spots on the A-team.
And if the youth training is not as fast as the normal one, you don't want to waste it on MVP+ talents.
It's a perfect way to fill up your bench or lower division team rosters with adept players, but since the market will be overflooded with those semi-developed 21yo, in a couple of years, no one will get any money by selling since there will be no need to buy them. Market might collapse.
In my humble opinion, a Draft system and a Youth system can't coexist. It's two different ways of adding young new players to the game. You can have one or the other, not both.
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One way might be to change the draftsystem a bit. Drafting players at the age of say 16-17, and instead of drafting them to your original roster, you have a Youth Development Team(YDT) where you can mold/train your draftees a bit further in the areas you want them to develop before you can promote them to your roster. Players can stay in the Development Team up to 19 but can be eligable for promotion at 18. The YDT will not have games to play(stressing the server), only weekly progress reports from your Youth Training staff(No need to add new type of staff, or...?).
This way you could still keep the draft system AND develop your young players a bit(slower than normal) before they join your Team.
OR you get rid of the Draft system that somewhat favors bad teams and create a Youth Team that will favor already good teams and managers. I still don't think youth games are necessary or needed. The main, if not ONLY, focus will be on developing players. Get your tactical skills by playing scrimmages and PL:s.
Main thing is that this training is not as fast and efficient as normal training. So if you want to develop a 140+ TSP player you need him to play A-Team basketball, not Youth basketball. Maximum skill levels and age need to be restricted, limiting the amount of development a player can get before promoting to your A-Team. I think youth players in this case should auto-promote to A-team when they turn 20.
Developing young talent means you need to sacrifice something else. Thats just the way it is in this game, and all manager games.
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If you need to make new managers feel competitive, maybe give them the opportunity to play (or autofill) a Private League with all new managers without the need of Supporter. There they can experiment with players, lineups and tactics against managers in the same situation/development.
(Sorry guys, but nothing to do at work today... ;-) )