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What's the problem with giving a free transfer? It's a tournament, you'll be playing anyway. Is it about player motivation? Then why register at all if you've lost motivation in the game? I understand if it's a show match, where the audience decides who plays and with what, but otherwise...
The problem is that they're suggesting turning this into a spectacle. Generally, people pay for entertainment. Moreover, this whole thing will be managed by a specific team. Stop expecting everything for free; we're in a different system now – we have a market economy.