Ill give a suggestion, pirates are somewhat cheated. It's in 'bold' because I vent to much sorry.
I played Diplomacy for the first time. I began as I always do and didnt payed the pirates a cent... so this is what happened. The pirate rushed ended up rushinng me 3 times and another race 1 time just after I finished one war with the pirates. I barely could count them during this period and I had a big army for the time, tough everything else but my capital's were gone almost each time. The first engagements with the pirates they probably were weaker and they had less ships.
They come a forth time to my home planet and blowed structures in their path (ship factories) in a few seconds. The biggest problem of all is that their atacks are too frequent. They are not easily to kill now and also as I'm ending one war with them another bunch is promptly comming. There is no time to produce the original force again much least to develop my civ. Another thing, they were killing my bombers in a weird way. They'd be gone in 2 or 3 seconds (I had like 8 squadrons being constantly produced and just 3 or 2 could stay arround at a time)... and somehow they appeared as they would come out already damaged? I don't know if that was a bug or the pirates, but was very weird as I could never see them coming out full or in green health bar. Those pirates don't even have fighters to be able to persui and hit bombers easily, still they kill them in 3 seconds from frigates... they lost all their glow, they looked like flies.
While I see now that I should play bounty, I noticed the immersion with the game being lost. This game do needed challenge tough. But its due to the fact that you always notice how cheated the pirates are. They arent even a race to develop itself and have this unbeatable technology. Their rush not only are so frequent but also war takes longer giving no time to recover or progress. Also pirates shouldnt be playing a role bigger than the civs. How can that be? They should be just be pesky and more trouble.
I could pay bounties off myself, but as I see it, using them against the AI races will obliterate them? Strangely enough I find myself even feeling for them, it's very unfair. Also I want to engage them, not to see cheated pirates automatically ripping off the AI's I placed. Or might be the damage against them lowered? Anyway...
Their attacks are too much frequent, they take a lot of time to kill and have these junky looking ships best them my own best. The problems were two: Pirates being somewhat weak and were giving free XP.
We may think that pirates not giveing exp may not make sense. Maybe we could see it as experience dealing with the pirates. I suggest to make it possible for capital ships to earn experience from pirates just till a certain level, like 4 or 5 and then more battlefield experience should be earned by battleing against the more experienced (the ones that supposedly use more of strategy because they are better organized and also posses better technology development) which should be the civilizations.
The best that players can do is to send their novice capital ships to go pratice dealing with the pirates, which makes sense and is immersive, just to a level limit of 4. By this, it's possible then to increase the number of pirate ships turning them an annoyance for the bigger part. The few levels gained from them come from the expense of (in the best case) loosing some ships/defenses, being far and out of the bigger threats (the other AI's) but being also an alternative from buying the first upgrades. They shouldnt be weak as they were and sure not as tougher as they are.
Currently I think they are breaking some of the immersion, noone likes to feel that their ships are so very weak. You are obliged to keep playing bounty or else you get very crippled and out of the main picture of the game. I'd play bounty satisfactorily if just I couldnt get much more exp out of the pirates and if they were more challenging than in original Sins, tough balanced, so that they can help against the others and also to not move the main force arround. Just a few hangers could deal with them before.