I don't think raising the salary cap would really help clubs keep their players.
If the cap was raised to $5 million, the top players would just start demanding 600K, because clubs have more money. If they couldn't get it from their club, they'd just go to another NRL club that would.
The current cap is $4 million, and Petero wanted 400K. What's the bet that if the cap was $5 million, he'd have wanted closer to 500K?
Maybe players would be more likely to stay in the NRL, but it wouldn't prevent situations where players simply are squeezed out of one NRL side into another.
Every players' wage would naturally rise.
Less teams and a higher salary cap would be ideal in my opinion. As more players go to England and the Titans have come in, the supply of quality players in the NRL has dropped, and hence the standard has as well.
Personally, I'd either cut Penrith or merge them with Parramatta. Two teams so close to each other is stupid, especially in Sydney where there's already a glut of NRL sides.
The next club in the firing line would be Cronulla. Geographically, it would make sense for them to merge with Canterbury, however Canterbury(as much as it pains me to say it) have such a strong history that this would be unfair to them. Also, clearly there are some cultural differences between the two regions.
If I was being a hard marker, and I had to make it a 12 team competion, I'd go:
1. Sydney Rabbitohs
2. Gold Coast Titans
3. Manly Sea Eagles
4. Penrith-Parramatta Eels
5. St George-Illawarra Dragons
6. New Zealand Warriors
7. Newcastle Knights
8. Canterbury Bulldogs
9. Wests Tigers
10. Brisbane Broncos
11. North Queensland Cowboys
12. Canberra Raiders
$6 million salary cap.
Cronulla gone as there are too many Sydney teams, and they are just about the most mediocre of the lot.
League will never fully catch on in Melbourne. They're a gun side now, but only due to good manangement, rather than being a great league production region.
Souths and the Roosters to merge, as they both struggle for juniors, like it or not. Combine the two junior bases, and the two foundation clubs. There would be much whinging from both clubs about it, but at least they'd be forced to stop bitching with each other.