The vast majority of gyms are on the up and up. If they tried to field a worlds level 5 team, their reasoning for dropping to a level 4 is that the team isn't performing at a competitive level 5. Therefore, instead of chasing an improbable bid and risking injury, they are making the team competitive for the remainder of the season. Not to rope kids into a contract with a worlds team and then (insert wicked witch laugh) pulling a bait and switch to a level 4. And if the TEAM isn't performing well, aren't YOU part of that TEAM? As a parent, I have a problem with "my kid is better this everyone else on this team so we are going down the street to join a better team."
My advice is read your contract before you sign to any gym. Cheerleading is way too expensive to sign your child away without knowing what you are signing. By the worlds levels, as a parent, you should know the ins and outs of the industry well enough to understand your contract, understand what can go wrong, and understand what your goals are. Is your concern is the team may drop levels or the gym may close but there is nothing in the contract to cover those issues, ask for an amendment prior to signing. If the request is denied, look elsewhere before signing.
This is what drives me crazy about people complaining about teams dropping a level and that's why an athlete should be released. If your team moved to level 4, let's be honest, you probably weren't getting a bid anyway. If a gym started with a level 5 team and then saw that the team was not progressing or hitting things correctly or safely as they had hoped, they SHOULD move down for the safety of the athletes. I don't think it's hard to tell by October that your team is not going to be a successful level 5.
I don't disagree that there should be some sort of an appeals process, but I do think there would need to be very strict criteria in order to be considered for an appeal and I don't think all of the criteria I personally believe should be met is even possible to prove at this point. I don't know that the USASF has the time or the manpower to go through every random appeal and correctly determine whether the gym or the athlete/parent is right.
I think you should have to submit an invoice from the gym stating you have a $0 balance. That's easy. If the gym cannot or will not provide you or the USASF with an invoice, whether it show a balance or not, that's a strike against the gym.
I think that an athlete must be credentialed at level 5 in all areas PRIOR TO NOVEMBER 1ST before submitting an appeal to be released from a gym because they do not have a level 5 team.
I think there must be documented proof that the gym is "unsafe" if that is your claim to leave. I wish it was possible for the USASF track all deductions/legalities for a team. If you have a team that is consistently receiving excessive deductions (because the athletes cannot safely perform the skills you are having them do) or safety deductions at event after event, they lose the right to hold an athlete. (I think this sort of thing would be beneficial in more than just this situation, by the way, but it would be SO difficult to track and do something about). If you believe the gym is unsafe because of criminal actions of a coach, I would assume you should be able to prove that charges were pressed against that person, and therefore, should be eligible for release.
I do think it's kind of crazy that a gym closing down is not an automatic release, but at the same time, what if the gym is closing because of kids jumping ship for frivolous reasons? If you were a member of a gym at the time it's doors closed (meaning you did not leave your team at that gym to go to another level 5 without a release prior to the closing), you should be granted automatic release. If you were somewhere else at the time of the closing, well, then you may be SOL.