I guess I shouldn't really ask the question without putting down my thoughts too.
I'm in favour of a salary cap for the reasons above. Given that we don't want to ever discourage coaches from playing games we'll need some way to rebalance teams that have played very different numbers of games in a season. If we don't do this then very quickly one or two teams will dominate because they'll have much more developed players.
As for what level the salary cap should be I'm less sure. I've not got much LRB5 experience so feel free to contradict anything that follows.
Based on old 3rd edition I most enjoyed around the 250-300 team rating mark. At this point most players had a skill or two and teams also had a couple with 3 or 4 skills. So this would be my starting point. Now I played mostly with elves so I'd expect their TR to be higher than average for this level of development due to player costs so maybe it needs to be lower than this. Also, in LRB5 team value only goes up when a skill is achieved, not just when SPPs are earned, which is another reason for me to think that it needs to be lower than 250-300.
Putting this together makes me think that a TV of around 2,000,000 gps is a good start point.
I'm also keen on the idea of not having a fixed salary cap for all teams, maybe introduce a little randomness so the best team can get nerfed and the worst can get lucky. I'm not thinking a big difference but maybe a range of 1,750,000 gps to 2,250,000 gps? The way I picture it the biggest source of income would be a random amount from sponsorship, then there would be prizes depending on where you finish in your division and finally if you have any spare cash in your treasury you can also use that.