Sounds like there is someone that knows them - maybe they'll vouch for them. Tough to just delete them but they should have taken care of this by now. I'd just give them until Sunday morning and in the meantime come up with an alternate plan...
Me personally, I would pay out according to how everyone finishes minus the slackers. IE if they get first and 2nd respectively, the guy that gets 3rd actually gets 1st place money, etc. I wouldn't put 2 more teams in unless your payouts went that far down and I'd just give payouts according to how they finished and wouldn't add them to the playoffs. So if you take 6 to the playoffs and pay 4 for example - guess if you made the playoffs you made money if the slackers don't pay.