I may have explained how this would work. Players would not sign a contract for a specific amount of money. They would sign a contract saying they would paid according to their performance as determined by the panel each year. The teams would pay a set % of their income (say 50%) into a pot, say the Yankees paid 200 mil, and the Marlins paid 45 mil, and the league wide average was 100 mil. Each team's players as a group would receive 100 mil, modified by their place of finish, so say Tampa Bay had the second best record in the league, they would receive 132.5% or 132.5 milllion. Then at the end of the year, a panel would look at the performance of the Tampa Bay players, and divide the 132.5 mil between them accordingly. Each player gets paid according to how well they play each year, and as long as the team does well, a star can get paid every bit as much with the Marlins, as with the Yankees. As a matter of fact a star on a really bad team, might get paid even more for a great performance as they would on a team full of stars, because the good team would have more money, but the money above minimum salary would have to be split among 10 stats rather than one or two.
Small and mid-market teams could totally complete with the big boys.