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I think this is pretty much the ideal, though I worry that they won't hold at 4. I like 4 because I want the minimum number needed to include every team who at the end of the season can legitimately say "We've played the very best season in college football." That is usually 1 to 3 teams. So the fourth gives you insurance and balances out the schedule. There is no way that there are 8 teams who will be able to make that claim. Usually #8 lost two games and/or didn't win their conference.

One of the biggest flaws with the current system* is that you can have 3 very good teams go undefeated and 1 of them gets left out. That happened to Auburn. You could, theoretically, have the same problem with 5 teams, but that is very unlikely. I'm not even sure it's ever happened. So that problem is fixed.

You can still have a team go undefeated and not get a shot at the title. And that will probably happen - which keeps College Football as still the only sport I can think of where that happens. But without expanding the playoffs to 16 teams that can't be fixed.

*So there's been a lot of talk about how NOW we'll have a playoff and that things can be "settled on the field." But really very little has changed. For starters, we've had a playoff since the BCS started. It was just a two-team playoff. Now it will be four. For those who think it's not settled on the field - it still won't be. Teams will play their seasons and then hope that they get picked for the playoffs by a group of judges - same as before. It won't include computers, and the selection committee will work together, instead of in the blind as is done now, but still, if you think it was a beauty contest, it still is.
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