Just re-reading this thread as it came back to the top of the pile. The historical analysis and identification of the issue was spot on but the solution just doesn't look plausible to me.
Carlton Blade made the point about the proposal only working if there were two separate games. I think this is worth considering, but would frame it slightly differently as one being a global entertainment business and the other being sports clubs.
A lot of people will hate this suggestion, but here it is anyway. I would create 20 new franchise clubs across Europe to compete in a Super League with no promotion or relegation (to avoid the PL financial cliff face) and let owners chuck all the money they want at it. In return, introduce real wage and transfer caps in domestic competitions, mandatory fan representation on boards, capped ticket costs, etc. to bring clubs back to being clubs rather than businesses. In effect, one product for Hollywood and one for football fans.