Promotion/Relegation based on regions/states

[Kodos]

I have an OD where we do something along these lines. Teams move up and down within their color band. Subbed in a few teambuilder teams to balance things out geographically.

[shoot_tastes]

You listed Ohio twice

[Toewsface]

I did this before and while it was fun, there are definitely some issues to be aware of, chiefly:
1) You're going to have a situation where a normally very strong team has a disaster season and then follows it up with an undefeated one after murdering a bunch of lesser quality teams (I saw this happen with USC, Oklahoma State, and Florida). This means that a team that goes 2-10 one year could be playing in the national championship after killing a bunch of Sun Belt quality teams.
2) There's a bad feedback loop with recruiting and competitiveness in the human player's conference. The more you win, the better you recruit, but many of the recruits you're competing for are also sought by teams within your conference/region. Over time, you become more talent concentrated while those teams get continuously weaker. By year 5-6 of the dynasty, you really won't have much strong competition within your own conference.