2. Pick a decade - 1950/51-1959/60; 1960/61-1969/70; 1970/71-1979/80; 1980/81-1989/90; 1990/91-1999/00; 2000/01-2012/13 (yes you get 3 extra years for new millenium teams). Note - years will be strictly enforced, e.g. you can't use the 79-80 or 90-91 season for a 1980-1990 team.
79-80 is considered the 80s, fyi. A season spends much longer in the yy portion than the xx portion (thus the 96 bulls are the 95-96 team, the 86 celtics is the 85-86 team, etc). I can understand the division to help the 50s squad out, but the 50s suck anyway. Even if you combined the 50s & 60s, those teams are going to be so weak they will be uncompetitive.
Also, giving exclusivity in a non-draft format really gives huge advantages to the early entries.
Just my 2¢