I posted some thoughts in the classified forum, but I think the biggest issue you'd have to deal with is bad contracts. If someone signs a bunch of guys trying to be the Yankees, they may win the World Series then realize that they're stuck with big contracts on guys with declining skills. So they bail and now you have to fill a team resembling the San Francisco Giants of a couple years ago where the average age of your ML roster is 35.
Assuming you put a max on the prospect budget (to avoid insane IFA bidding to go along with tiny player payroll budgets) and put in a min. win policy, you may also have to have a max contract policy. I'm not sure what this does to the overall budget, but it will surely leave plenty of room for coaching, scouting, training, and medical. Like I said in the other forum, I'd be interested to see how it works. You'd just have to be willing to throw in the towel and allows trades if it turns out to be a train wreck.