I don't feel true damage would be a good idea, it limits counter options.

What if:
Unique Passive: Deals 40 magic damage and applies a stacking magic resist reduction debuff for 2 seconds. Reduces 2MR per second, stacking up to 10 times.

This lets it scale with the teams magic damage and it's own damage.

I think that would be a bad idea. mainly cause there's already an item that shreds magic resist as an AoE. if someone were to get an Abyssal scepter (which only costs 40 more gold) and this passive he'll passively shred an entire teams magic resist by 20-40 points. While someone with a Malady has to hack, slash, and chase just to reduce 1 target's magic resist by 24.

Malady can go great on anybody who tries a form of hybrid carry procing the 4 stacks and then using an ability that scales with AP (example: Warwick Ult and then finish with Q). Or if a brusier wants to think of having synergy with their burst mage to help them counter a tank.

Regardless I still stand by my position that Sunfire wasn't intended for teamfights, but for strong minion pushing/farming. If you want a strong teamfight item with high Aoe magic DPS, Ionic spark works. max out attack speed and the passive will be doing +300 DPS [125 magic * (4 targets) / (procs every 4th hit) * (2.5 attacks per second)] and effectively has a better aoe range (bounces at a range of 400 of each hit target versus range 400 centered on you) which means you could harass those under tower with impunity by attacking the minions. Could, but not usually as any player will be smart enough to try an back off from free damage (though it could secure a kill)

Ionic Spark will beat Sunfire Cape in dealing Aoe to 4 targets so long as your attack speed is at least 1.28 and nearly every Champion that scale with attack speed will need prolly 80%-110% bonus attack speed in order to meet that, and Ionic spark comes with a 50% bonus itself.

If I were to buff Sunfire cape, I'd say that it still deals 40 DPS but deals an incrementing bonus 5 magic damage to minions and range increases by 50 every 2 minutes you have it; maxing at 10 minutes. Dealing 40+(5~25) to minion waves and aura range grows from 400 to 650 when maxed. and perhaps lower the combine cost by 200-350 so that it could see action in a lane phase where it would truly shine.

Sunfire Cape really does enough damage already. 40 dps for 748.372 gold is insane, and yes, that is how much gold you actually pay for the passive. 51.6279 gold for the 20 additional health, the rest for the passive. It is nearly impossible to get 40 pre-mitigation dps for 748.372 gold of any stat, so Sunfire Cape, especially on a defensive champion; therefore, sunfire cape is a very good deal.

I build sunfire cape on tanks who don't have any clearing potential. Garen is not one of them. I never understood the synergy between Garen and sunfire cape. Is it because he spins into the enemy team, thus gaining some extra damage from SF Cape? All tanks jump into enemy teams and benefit similarly though.

That being said, it's a solid choice on Rammus for whom the Armor turns into AD in addition to the nice AoE damage. But still, there is no stat boost, and no matter what anyone says, that will always be weak. EVERY DEFENSIVE ITEM IN THE GAME worth its weight in gold combines multiple defense items into one slot, so that argument is completely invalid and has never been persuasive to me in the least bit.

I agree that the toggle would be greatly appreciated, but the huge buff? Nah, it'd be a game-breaking item that tanks would start abusing right away.

support, wouldn't mind seeing do like 2% of there health damage instead of 40dps like stated 40 falls off 2% wouldn't be op but wouldn't fall off at any point

3,000 life is average for a adc no health items really built that would be 60dps on them and on tanks with 4-5k health 80-100 dps this way it scales with late game instead of a flat out buff that would make it op early

also how about make it so it wont damage neutral monsters unless you're in combat with them then we wouldn't need to worry about an annoying toggle

as for tower agro i say just remove the fact it draws tower agro sense the damage it does is so tiny