LIVERPOOL'S wage bill has soared to £120million, despite the club's on-field slump.
The staggering figures have forced the club's new owners into a root and branch review of every level of the club.
New England Sports Ventures are assessing what has gone so catastrophically wrong both on and off the park in the past 18 months.
The astonishing salary hike - a £20m increase on 2008/09 - will be published in the next set of Anfield accounts and relate to Rafa Benitez's last year in charge.
The figures place Liverpool fourth-highest in the Premier League behind Chelsea (£142m), Manchester City (£133.3m) and Manchester United (£131.7m).
Although Liverpool's transfer spending has been curbed in the past 18 months, they invested heavily on existing contracts last season. Fernando Torres, Steven Gerrard, Yossi Benayoun, Dirk Kuyt and Daniel Agger were among those who received pay hikes, as well as a number of fringe and reserve players.
Benitez and his backroom team were also given new deals before overseeing their difficult final campaign.
Liverpool had to pay off and replace as many as 25 coaching and technical youth and Academy staff Benitez sacked in 2009, as well as compensating those from the Spanish regime who left last summer.
NESV see the financial anomaly between Liverpool's salaries and league position as the root of the club's decline.
They are in no doubt the mismanagement of the former hierarchy and recruitment policy of the ex-boss has left a legacy of serious economic imbalance. They say Benitez was given too much power under the terms of his last deal, and blame the chaotic structure under Tom Hicks and George Gillett which allowed him such a free rein.
Although outgoing owners Hicks and Gillett were chastised for their failure to invest, NESV believe the resources available were not maximised and they delegated too much power.
They have uncovered a culture of wastefulness and excess in the club's recruitment policy which will take time to redress.
Although there have been notable transfer successes in recent years such as Pepe Reina and Torres, NESV's over-riding perception is the club is overloaded with well-paid players who don't contribute.
The Anfield scouting system has particularly intrigued NESV during the course of the due diligence. It's not simply the transfer fees, but the massive hidden costs involved in buying players, such as signing-on fees, wages and agents' fees, which were out of control during the Benitez era.
Numerous 'free' transfers still sucked millions out of the club. The list of costly flops includes Philip Degen, Andriy Voronin, Andrea Dossena, Alberto Aquilani, Albert Riera, Charles Itandje, Emiliano Insua, Jermaine Pennant and Ryan Babel.
Because these players were given such lavish contracts, it's proven difficult to offload them and in some cases they are still on loan. Itandje hasn't played for two and a half years but is still at the club.
The club was also clogged up with dozens of foreign teenagers who were recruited at a cost of around £10m.
Clearing the squad of the debris left behind will be a top priority in January, but the owners recognise an urgent need to enhance its quality.