I don't buy this excuse. How many top players are playing in Abu Dhabi or China (where they can get paid shit-tonnes of money)? Top players want to play in Europe, that's just how it is for now.
The primary issue of wage caps is that it is perceived as taking money from the players and giving it to the owners. That need not be the case, in the US you have 2 kinds of wage caps:
Hard: you can't spend more than a certain amount. This amount is the outcome of negotiation between the league, owners, and players union. Here you can make an argument that the owners do have the advantage, however I would argue that advantage is marginal.
Soft: spending is unlimited, however above a certain threshold you pay tax on every additional dollar spent. The NBA uses this, but in addition stipulates the maximum amount of money you can give to any individual player over a certain amount of years. This shorts the compensation that top talent receives (LeBron James is definitely worth more than what he is being paid), but it also forces teams to be creative with their spending and move talent on when it gets too expensive to keep them.
My idea is too big for this post but I like the idea of taxing excessive spending. You want to buy $500m worth of players? Well it'll actually cost you $1.2b after taxes are taken into account. Same applies to the wage bill. That tax is distributed across the league by the way. Oh... But you get a credit for every youth player you bring through. In this paradigm you would have to ban state sponsors, but this also forces traditional big clubs to lean on more than their money to stay at the top. Oh, in addition, if you expect 150m in revenue but are looking to splurge 300m on wages, that 150m has to go into escrow immediately, to prevent clubs from going into administration.
I'm a dumbass and I came up with that. I'm sure some of Europe's brightest minds can come up with a great framework that evens the playing ground within leagues and across Europe, and allows teams doing the right things to shine.