We have consistently failed to cut our losses on players who aren't good enough, partially because of the write-down in book value that it would entail. If we sell a player for less than the remaining amortisation (even if the fee has long since been paid i.e. Maguire) the loss is taken in the year of the sale, even if the cash left the account years ago. Selling Maguire this Summer for less than ~£27m will result in a loss on the balance sheet. If we can't get that, we won't sell him. If we didn't have £25m in debt interest and £40m in dividends leaving the club every year, we could afford to take that loss.
Our debt is also one of the reasons why we often inexplicably extend contracts, to reduce the annual level of amortisation.
We signed Bruno in 2020 for 65m Euros on a 5.5 year deal.
This results in annual amortisation of 11.8m Euros
With 3 years remaining, his remaining book value was 35.5m Euros
We extended to 2026 (so now four years left)
Amortisation falls to 8.86m Euros
We only tied him down for one more year and all that did is reduce the amortisation costs - we're about to do the same with Lisandro Martinez too apparently. In Bruno's case, the sporting side aligns with the financial side, but what about Eric Bailly or Anthony Martial? Did either of those two deserve their last extensions?
Finally, wiping the debt adds ~£50m to our FFP kitty immediately, which almost certainly will be utilised.