Yep, very true. Just saying we as fans should not think so short-sightedly. A team exec/coach has to worry if the team is bad one year they'll be fired. We are able to think on longer time horizons.
You don't amortize it. Like you said, the remaining amortization gets combined with the transfer sale price. It can lead to the first year actually being a net loss on the sale, which is where the "homegrown players are so great for PSR, they're pure profit!" line came about.
My whole point is the remaining amortization is a
sunk cost, it will be incurred by the team no matter what. Look at the two Sancho scenarios:
Keep:
- 24/25 season: £14.4M amortization fee
- 25/26 season: £14.4M amortization fee
- Net cost: £28.8M
Sell:
- 24/25 season: £28.8M pulled forward amortization - £25M sale = £3.8M cost
- 25/26 season: zero
- Net cost: £3.8M
As I've just illustrated, selling Sancho for £25M improves our future profitability by exactly £25M. It's worth exactly the same as selling McTominay for £25M (excluding wages). The only "downside" some might point out is selling Sancho doesn't
immediately (in 2024/2025) improve our finances by £25M. It only frees up £10.6M in year one (excluding wages). But over a two year period it's the exact same as selling a homegrown player.
A sunk cost is an expense that cannot be recovered. We are incurring the £28.8M remaining of amortization on Sancho's fee no matter where we keep/sell/loan him. No one is arguing that the expense hasn't hit the books yet. The point is it will hit the books no matter what we do. So what matters for sale's value to the club is the cash Sancho could net us. From that perspective he's worth exactly as much as a homegrown player. The "homegrown players are worth more in a sale" fallacy would be like a manufacturing business lamenting the depreciation of one of their factories, thinking that because they'd "sell it at a loss" it never makes sense to sell.