What problem are you trying to solve?
Auctions are a good, fair way to apportion players, so if you're throwing all the available players back into the pool, that's the way to go.
You seem to also be having another problem, which is that some teams started too strongly and eveyone lost interest. There are two ways to deal with that problem.
1) Escalating salaries - players get more expensive to keep with each passing year. Personally, I don't like this method much at all, especially b/c it doesn't do a good job of what it's meant to do. For example, if you bought Priest Holmes before he came to KC for like $10, and he increases in salary 30%/year, even five years later he would still be a ridiculous bargain. If you bought him for $40, he would quickly become too expensive to keep, and would go back intot he available pool. In other words, great bargains tend to remain great bargains, whereas good bargains don't last.
2) Contract length - Different leagues do this different ways. In one of my leagues, all contracts are three-year deals, with no penalty for early termination. This ensures that good bargains last, but only for a limited time. Every year, there are a couple of top guys availalbe at every position, but most studs are locked up year to year. There are a lot of variations on this theme (some leagues allow longer contracts, or set a years cap, or have a fixed number of different kinds of contracts you can offer, etc.)
