Here is my proposed ranking system. What do people think?
The minimum number of competitors in a rankable tournament is 4. The
top 3 overall competitors get a point value depending on thier
placing, with everyone getting a minimum of 2 points just for
participating.
The points are-
8 points for first
6 points for second
4 points for third
2 points for everyone else

Bonus points:
Each participant will get one point for every person they end up
outplacing. For example, the person who comes in first place in the
smallest tournament allowed- 4 people- would get 3 bonus points. The
person who came in second would get 2 bonus point. Third, one bonus
point and fourth, none. But say we have a very large tournament
where we have 20 people. The person coming in first would get 19
bonus points. The person coming in fourth would get 16 bonus points.
The person coming in tenth would get 10 and so on. This would give
people more points for competing in larger tournaments.

Total scores:
Points for ranking + bonus points = your score
-Example for a person coming in first in a 10 person tournament:
8 points (for first place) + 9 points (number of competitors
outplaced)= 17 points for total score
-Example for person coming in 7th in same 10 man tournament:
2 points (minimum ranking score) + 3 points (number of competitors
outplaced) = 5 points total score
So even in the smallest 4 man tournament, a first place win would
get you 11 points while coming in last gets you at least 2.

Ranking:
The rankings will be determined by the average of a persons total
scores. So if a combattant gets 11 points in one tournament, 16
points in another, and only 2 in the last one, his ranking score
would be 9.67 (we will bring the scores to 2 decimal places,
rounding off the last decimal place)
Multiple competitors will be able to hold the same score and
therefore will have the same rank.

How does this sound to people? Any questions or suggestions?