The seedings are based on those teams performances in Europe over the last 5 years.
It seems a perfectly reasonable system.
I don't think it's reasonable at all. It just helps protect a tv cartel of the big 12 or so clubs going as deep as possible by the seeding being directly linked to previous season's performance which makes breaking it tougher and tougher as each season goes on. By the every title of the competition the top 8 seeds in pot A should be the top 8 ranked countries champions from the previous season imo.
It's more reasonable than your suggestion
Your system protects the strongest leagues, the current system protects the strongest clubs. Not much difference and just swings and roundabouts.
Arsenal are in the 1st pot coz they are one of the top 8 teams in the competition (and they would be, even without CL money).
Replacing them with Anderlecht would be silly.
If you wish to redistribute the money the CL generates, there are better ways than promoting your 'affirmative action' policies, which would simply weaken the competition.
I dunno, give the Champions of every league in Europe £10m. Distribute the TV money equally between all the teams that participate.
Even if you did that, or even further, if you gave Anderlecht Arsenals share of the CL money over the next 10 years and gave Arsenal Anderlechts share of money, in 10 years time Arsenal will still be the richer and stronger club due to other income streams.
In your system, teams like Celtic/Apoel/Basel/Olympiakos that have previously done well at European level can't EVER break into the top seeds due to their countries co-efficient.
Also if you have a problem with the title of the Champions League, would you prefer if we named it the 'The Very Good Teams League'?