There's another solution to making baseball teams more competetive: "Contract the ones that don't have fans."
Fact is, there are probably too many teams right now, and if you aren't drawing fans, it's time to close up shop. Normal businesses are bound to the laws of economics, but sports franchises aren't?
Listen, I think its noble to want your team to succeed, but the fact is, if you're team isn't drawing fans, it's not because they don't sign big-time free agents like the Yankees. The Phillies have one of the highest payrolls in the majors and they don't draw huge crowds -- why?
The Phillies may have a big payroll, but they still lose a lot of games (conversely, there are a number of teams that win on small payrolls). Not only do they lose though, they fail to market themselves to fans.
What does a salary cap create?
How about a Yankees team that consisted of A-Rod and a bunch of minor leaguers? Or a Red Sox team that only had Manny and nobody else with talent? Big name players are still going to get big-name money, but the game will become shitty and boring, and fewer opportunities for major league talents will exist. How many teams RIGHT NOW are anchored by a single offensive superstar?
Fans create the problem. Mark McGuire, Sammy Sosa and Barry Bonds have all been turned from potential contributors to a great team, into simple marketing gimmicks. They get their stats and break their records, but it doesn't help the team. Fans flock to the stadiums out in those cities to see it though.
There was a time when fans cared about baseball. When kids played in the sandlot. Now we're talking salary caps and all this other bullshit that is just going to support the creation and promotion of more gimmick teams.
If a team isn't making money, it should shut down or move. Simple as that.
Really though, when you look at it, it's not about money, its about good management. The A's are an excellent example of what a team can be on a small payroll.
One big problem I have with a salary cap though, is that it completely changes the dynamic of the hometown hero. Guys like Bernie Williams and Derek Jeter, who played their whole careers in one town won't be able to under a cap. If you develop too many good players, you're punished for it by not being able to keep them all. Jeter came up through the Yankees system and now he makes something like $20million a year. They didn't buy him -- they drafted him and developed him. The fans invested in him too.
With a salary cap though, he'd be out the door. Football is like this. Talented players become cap-casualties all the time.