Instead of a mwr, has any league ever tried to reduce the amount of money a team could use for failing to meet certain win requirements? In some ways this is what happens in real baseball as attendance drops etc (yes I realize it is not that simple)

I've thought about this.  It's theoretically possible-- you could ask a team to transfer funds in increments of $4M from payroll to prospect, and then transfer the resulting $2M back to payroll, causing a loss of $3M-- but might be hard to enforce, since you'd have to remove an owner mid-season who refused to make the transfer, rather than not allowing the owner to re-up at rollover.

I took over a team this year that is pretty bad and I feel that that would not be far for people who take over a team not knowing if they are bad or not. In my league the Min is .250 and I am so bad (12-50) I think its .201 that most said they wouldn't vote me off another thing that bothers me about that is if people are paying there money to play why would a league try and take a team away unless they are getting there money back.

If a team misses a MWR, and you take money away from them as "punishment", all you are really doing is making it HARDER for them to hit the MWR the following season.  I'm not sure what your desired goal is with doing that.

Many different scenarios have been discussed in these forums over the years as alternatives for losing your team due to failure to hit MWR.  The cons generally outweigh the pros.  

A hard rule for "hit the MWR or you lose your team" is really the best incentive for competitiveness, as harsh as the penalty may seem.

Agreed. It also helps to require teams to maintain their minor leagues. Some interesting variables out there on salary caps, too.

Don't look at it as "punishment" or "penalty".    Look at it as a "reward" for 31 other owners.   If a world's selling point is competitive, it needs to be that.    Allowing owners to run out 3-5 consecutive 50-60 wins seasons is allowing a team to not compete now and build a team of high draft picks/expensive IFA for the future.  That's not what you're selling.

I mentioned this in another thread a few days ago but I've been doing a sort of informal survey of one/done owners.   The two biggest reasons were competitiveness and bickering.    An owner can block the bickerers if it bothers them but they can't fix competitiveness by themselves.   That's a 32 man effort. 

Possible pre-emptive solution:  restrict budget transfers, or hardwire a minimum ML payroll. 

The worst examples of tanking (I've seen) drive the ML payroll down to ~20 M, then dump massive cash into pursuing IFAs (at inflated prices).  Remove the temptation to go that route: set a cap on budget transfers, like 'no more than $10M can be transferred out of a budget category in a given season.'  

If you can't transfer money toward prospects, what else is there to do with it but field a basically competitive ML squad?  

And it's not like this restriction makes the IFA shopping any worse.  The prospects will be the same, but there's a saner ceiling/pool of cash pursuing them.