Milan hand out big salaries too easily, likes of Kaladze get 4m, and all of their deadbeat players Serginho, Cafu, Dida, are on huge salaries. Its their whole issue, carelessly big salaries for average or done players.
In one Italian magazine i read one interesting, and rather critical, article about Milan and the salaries they give to their players.
Their wage bill is the highest in serie A. They pay ~125m euro per year only for player's salaries (taxes included) , without counting the bonuses they get for every win, every goal, every assist, every clean sheet and without counting the salaries of Ancelotti and his assistants. If we count all these, then we get a number close to 140 m eur per year.
No matter how they do during the season, they have to pay 140m euro to the players and the coaches.
Inter are behind them with some 15-20m euro less, while we're third with ~40m less.
Maybe this doesn't seem so strange, but it is. Milan have no squad depth. They rely on some 12-13 players during the year. That's actually the main reason why they're doing so bad in serie A in last 2 years.
Inter on the other side have around 25 players of , more or less, the same quality, and Inter can allow to play without 4 or 5 first team players and still do good. Milan lose 2 players from starting XI due to injuries and they fall apart.
So, Milan without squad depth pay much more for salaries than Inter with great squad depth and they pay 40m eur more than Juve, with Juve also having more squad depth than Milan. To make it more clear, in 4 years time (the usual period of one contract) Milan will spend 160m eur more than Juve, only on wages.
Just as an example, Digao (Kaka's brother) is the lowest payed player in Milan, and he's getting 1m eur a-year (tax free). Before Bianchi's arival this January, Lazio's highest payed player was earning less than 1m eur. Giorgio Chiellini gets 900 000 eur per year.
Iaquinta gets 2m eur while in Milan Simic, Favalli, Serginho and Cafu get 2m eur.
Jankulovski gets 3m eur per year. In Juve it's Camoranesi who gets these wages.
Kaladze gets the same money as Del Piero, Ambrosini gets 3.5m eur per year while Maicon in Inter gets 2m eur.
If we compare it with Roma's wages then we get even funnier picture. Kaladze gets 4m eur per year, while Vucinic, Aquilani and Mancini together get 2.8m eur total.
The author of that article was criticizing Milan for this and his conclusion was that these high wages are the reason why Milan have much less money than the other big teams to spend during the summer mercato. Another interesting point was about the famous "family atmosphere" in Milan and how players don't want to leave Milan and stay there for 5,6,10,15 years.
Well, of course they don't. They aren't crazy to leave the team that's been giving them such fat salaries.
But this year things will be changed, no matter if Milan play CL or UEFA. It's expected Milan to finally get rid of oldies. Cafu, Favalli, Serginho, Maldini, Simic, Dida, Emerson and Brocchi cost the team ~36m eur per year (taxes included).
By losing them they get rid of their incredibly high wages.
Now we will see an agressive Milan on the transfer market and the wages Milan will be offering to the players will be really attractive. By offering them much more money, Milan will be the wanted destination for most of the players, even if they don't play CL.