This doesn't take into consideration the owner's motivation. Perhaps he views the player's transfer list as significantly under priced and will sell him in a week or two
Everyone is free to go bankrupt if they want. It will teach them a lesson
Okay, but I thought this discussion was about new players getting frustrated and losing interest in BB. New players wouldn't be able to an identify an underpriced transfer (not correctly, anyway). We don't want to teach newcomers harsh lessons, we want to give guidance. Taking on too much salary is a common rookie mistake. This would help prevent it, which makes the game better for everyone.
Or more likely, that the player he is bidding for will replace a current starter which will allow the owner to list the replaced player to both reduce his weekly salary and produce income from the sale.
That would be one of the caveats I mentioned but didn't elaborate on. To expand the formula:
HighestSalaryPurchasable = TypicalWeeklyNetIncome + (CashOnHand/5)+ AverageSalaryOf5HighestPaidPlayers + SalariesOfOutgoingTransfers
AverageSalaryOf5HighestPaidPlayers is a way to account for the new player replacing one of your current players. It adds to your salary ceiling by a reasonable estimation of a current starter's salary. In other words, if I can afford a $80K player, and my typical starter makes $20K, the formula will let me buy a $100K player: the $80K I can afford, plus the $20K I'm assumed to be shedding. This should be plenty of headroom to allow for talent upgrades without having to sell the replaced player first.
Also, salaries of any outgoing transfers would be added to TypicalWeeklyNetIncome. Those are expenses the team will soon not have to pay, thus raising net income. (We might need a rule that they must have a bid placed, or be priced within transfer price guidelines, to prevent abuse of the system.)