Just like every rule, it is meant to be utilized and will be by every team. You spend to the cap. 10% re-signing bonus for vets, if every contract included it, would mean maybe 6% increase in cap. Maybe. Probably less, maybe 200k. Which you are allowed to exceed the cap by already, if you want. And some teams have found other ways to circumvent the cap and sign star players for suspiciously low contracts...
The key here is retention of players. Like the NHL and extending max term for re-signing, or the max contract in the NBA only being allowed for players signing with their current teams , it would be an advantage for a team to re-sign its players. Because contracts are not guaranteed, the NHL and NBA clauses would not work. So, you need another way to do it. By giving teams a "slush fund" outside the cap that they can use *if they want/need to* to retain players, you create more continuity.
The actual budget, especially if the cap is adjusted down, would be the same... just you'd be allowed to spend more on your own players.
You can do that already in the SMS. I'm not suggesting we should have re-signed A. Harris and released one or both of Oliveria and Augustine, but that was a choice teams have.
Shifting some SMS into exempt bonus money is just another way of raising the SMS. Even though you are suggesting reducing the regular SMS to offset there is zero to gain.
Retention of players is a great idea. Feel free to explain how any of this would have helped retain Lawler as an example The number of highly paid veterans varies season to season and team to team. Succession planning comes into play. Money is not the only factor why players move to other teams.
When players start earning $700K ( Reilly ) or Lawler ( $300K ) it means something has to give. If you're suggesting the actual total would be nearly the same then it's just playing games and slight of hand. There is a reason for a hard cap and penalties for going over.
This is true in the NFL as well. I just read that the Chiefs decided to not re-new the contact of Matthews ( previously about $40M for 3 years ).
I'd support raising the SMS and the ELC level if the league can afford it. I don't believe they can or will in the near future. Regardless of the $$'s in the SMS teams will always need to adjust how they spend their money to put together a roster.
Every time a player does well after his 1st ELC there is a chance of wanting a significant larger contract. That's why players move in free agency.