I am against a two-tier Champs League as suggested by Burnsy. The 2nd tier would effectively be just a rebranded Europa League. The fact is money has changed the game, and we can forget about the romantic days of European Cup, Cup Winners Cup and UEFA Cup. Nobody cares about 2nd tier tournaments.
Some thoughts on execution
1) Make it exciting early on in the season by having a few knockout rounds that bring the teams down to 32 teams. This would mean involving the champions of Italy, England, Spain etc in at least one round of knockouts. To appease the big teams, you can seed 8 of them to ensure they all end up on the top half of the draw.
2) Remove / reduce country protections. If 5 teams make it through from England, there should be no problem with letting Chelsea and Liverpool knock each out in the group stages. If they can knock each other out in April, why not in December?
3) To help wealth redistribution, redo the revenue share calculations to reduce the gap between champs and chumps. Teams that progress make enough through gate-takings.