“Who is stronger?” – Might versus Magic.

Maybe not ideal, but a draft system with the possibility of ordering the same faction as the second faction only in the superfinal game? (meaning you won't be able to play all games as Necropolis, but at least you'll be able to play one game as them, and if you reach the final, you'll play two), otherwise, with a high probability, we won't see Necropolis at all.
1/4 vs. 1/8 is basically the same, but considering that some strong players don't make it to the playoffs, I think 1/8 is a more reasonable option.