[Skipaway]

Put it this way, if a player is worth $10m, a reasonably rich team might be willing to overpay a bit just to win the player in the free agent market with $11m. The original team can easily match that by offering $12m, and in reality only paying $12m*70%=$8.4m. The original team wins big this way, and the player is happy too, because he gets to be paid above the originally perceived market value.

Now, what team would be able to pay this $10m player $15m and make it not worth it for the original team to retain the player anymore? Only the Yankees.

In the end, the system would ended up even more everybody vs. the Yankees than it is right now. In the mean time, it would also simply boost the total payroll, because teams suddenly are forced to spend somebody else's money on players.