He fears it will create a league of haves and have-nots and drive up the price foreign players.
"When teams spent a lot of money to bring in players, MLS likes that, but it's not good for us because one of the teams that spends the most is our biggest rival (Toronto)," he said.
TFC made a splash last month with the signing of Juventus midfielder Sebastian Giovinco, reportedly for $35 million over five years. The Galaxy then signed English star Steven Gerrard reportedly for more than $6 million per season.
"Over time, only certain teams will keep spending, that is Los Angeles, Toronto and New York, and there will be those three teams and then all the rest," said Saputo.
"On one hand, it's good because it brings credibility to the league, but long term, I fear it may hurt the league."
He worries that players from Europe and other areas may feel that "the streets of North America are paved with gold" and raise their salary demands. He added some players are already playing off offers from MLS clubs to land better deals with European clubs.
Saputo said he voiced his concerns to MLS commissioner Don Garber, who supports big contracts to star internationals because he hopes it will become the league of choice for players.
"For sure, if you spend crazy amounts on players it will be the league of choice, but for me, it's not the way to do it," Saputo said.