I don't like hard caps for several reasons, mainly because it isn't feasible nor fair. Clubs who are doing better financially shouldn't be constrained to spend only as much as clubs that are doing much worse, for example, Bayern shouldn't be spending the same amount of money as Augsburg on transfers and wages; and if we turn this around, it is also not feasible to expect Augsburg to spend the same amount of money as Bayern does, which might be too much for Augsburg and becoming a huge burden for them.
A salary cap does not dictate that Augsburg must spend up to the cap, it simply means they cannot spend more but they may feel free to spend less. I absolutely do believe that financial superiority should have limited advantages on the pitch. Top clubs or the PL hoarding half the worlds talent can not be in the interest of fairness or competition any longer. Football needs to reverse to a state where money is an assistant to generate success, but not a necessity.
The underlying idea behind the thought of caps is that "Money needs to leave the system" in order for football to deflate. Now for a start we can't actually tell City, PSG or the PL that they need to give away all their money, or share it with the rest of Europe. They have no reason to agree to this. But what we can do is limit the power money has on the market, aka transfer/salary caps. An oversimplified example would be this: Even though ManCity has €300m to spend on players this summer, a transfer cap limits them to spend just 100m on new players. The other 200m must be used for other purposes.
This still creates incentive to generate wealth, as it can be helpful to generate success. Richer clubs will continue to have an advantage, as they have more funds to expand training facilities, build academy camps in developing countries, or modernize stadiums (urgently necessary in Italy for example), clubs may invest more into technology or advancements togain an advantage by improving training efficiency. Generally things which are also excellent for the game itself, and this must be our goal: Reward those that seek to improve the game.
But wealth will only have so much power to influence the competition. There will be less "super teams" and a landscape of players split out more evenly to more teams. Midtable teams can have access to great players and aren't being raided by those up the food chain. Generally teams will not feel like they now have to get a sportswashing sugardaddy aswell to stay relevant. There will be more incentive to develope youth players and improve the infrastructure of football. And also very importantly: This can help Non-top 5 leagues aswell as lower divisions to catch up with the top and not act as feeders with no chance of escape.
The problem I have with UEFA's new FFP (salary cap based on a percentage of total revenue) is it doesn't seem to have safeguards to stop the "oil clubs" from receiving a lot of sponsorship deals from their own countries but all at deemed fair market value (something apparently UEFA will be checking), and hence pumping up their total revenue and consequently their salary caps in a bogus way.
Yes, this is also why I think "revenue" based caps can't be trusted over hard caps. City has one of the highest revenues, thanks to sponsorship deals with companies noone has ever heard of that have no staff, sell no products, and are being run out of a mailbox in London like "Wega" or "3Key". Revenue can be artificially pumped up, making FFP pretty much worthless.