The likes of Madrid and Barcelona etc would never agree to a cap on wages, but if it came in for the PL the huge money in the game would more or less stay with the clubs instead of going into players and agents pockets. That money might then be better spent developing local talent. Back in the old days when English clubs dominated in Europe the teams were full of UK and Irish names, the odd overseas player here or there. Nowadays even if there is an English player in your team they are most likely from the other end of the country.
Over time, I don't think this would be true though.
The appeal of the PL as a global entertainment package is that many of the best players and biggest stars play here. I'm assuming part of the appeal from any given nation is the fact that some of the major stars of that nation's team are playing for one of the top clubs here.
Over time, a salary cap would mean the best (foreign, especially) players would choose a higher salary elsewhere than a lower one in the PL. The more this happens, the dimmer the PL's attractiveness to a global audience and also to players who may otherwise sacrifice a larger wage for the kudos of playing in the PL.
"Back in the old days when English clubs dominated in Europe the teams were full of UK and Irish names, the odd overseas player here or there" - it was also the case that Spanish teams were full of Spanish names, German teams were full of German names, Italian teams were full of Italian names, etc.
If English teams are the only ones who progress back towards that kind of setup (while Real Madrid for example, can still fork out for the very best players in the whole world and not just their own country), it may be good for match going fans to have more of a connection with a local team full of English players, but it becomes less likely that English teams will be able to dominate in the way they did in the past.
Less domination equals less global revenue, equals less money in the English game, whether that's with clubs or players.
