Kansas City
Justin Sunwoong Choi
A01982970
Dr. Cliff Skousen
Kansas City
Bill Ahern was asked to be an arbitrator in a dispute between the Owner-Player committee and Professional Baseball Players Association. The issue was the profits of the major league baseball teams that the owners maintained, however, that most of the teams were actually losing money each year.
Bill Ahern first visited the owners’ representatives of Kansas City Zephyrs, which was one of 14 American League teams and 12 National League teams, and then the players of Zephyrs. Bill discussed with the owners about the players’ salaries expense, nonroster guaranteed contract expense, and roster depreciation expense. Then, he talked about roster depreciation, overstated player salary expense, and related-party transactions while meeting with the players.
1. How should Bill Ahern resolve each of the accounting conflict between the owners and the players?
Bill Ahern should definitely work on making owners and players to understand the situation clearly. First, he needs to explain about the Roster depreciation that appears in owner’s statement for 2,000.0 but 0.0 for players’ to players. Players understand that the Roster depreciation isn’t meaningful number which actually is something that has to be paid for 50% of the purchase price ($12 million) when the team was bought in 1982 by the owners. Second, they somehow need to combine the current roster salary and amortization of signing bonuses. Because the owners are including the bonuses in current roster salary when players separated them in a different category. Also, the owners and the players need to figure out the exact amount of the bonuses paid in each year, and how much they are going to deferred the rest of the bonuses. Third, Bill has to confirm if the owners are the sole owners of the stadium or not to see if stadium operation actually coast that much. After all the disputes were cleared to each other, they can come up with more accurate
A01982970
Dr. Cliff Skousen
Kansas City
Bill Ahern was asked to be an arbitrator in a dispute between the Owner-Player committee and Professional Baseball Players Association. The issue was the profits of the major league baseball teams that the owners maintained, however, that most of the teams were actually losing money each year.
Bill Ahern first visited the owners’ representatives of Kansas City Zephyrs, which was one of 14 American League teams and 12 National League teams, and then the players of Zephyrs. Bill discussed with the owners about the players’ salaries expense, nonroster guaranteed contract expense, and roster depreciation expense. Then, he talked about roster depreciation, overstated player salary expense, and related-party transactions while meeting with the players.
1. How should Bill Ahern resolve each of the accounting conflict between the owners and the players?
Bill Ahern should definitely work on making owners and players to understand the situation clearly. First, he needs to explain about the Roster depreciation that appears in owner’s statement for 2,000.0 but 0.0 for players’ to players. Players understand that the Roster depreciation isn’t meaningful number which actually is something that has to be paid for 50% of the purchase price ($12 million) when the team was bought in 1982 by the owners. Second, they somehow need to combine the current roster salary and amortization of signing bonuses. Because the owners are including the bonuses in current roster salary when players separated them in a different category. Also, the owners and the players need to figure out the exact amount of the bonuses paid in each year, and how much they are going to deferred the rest of the bonuses. Third, Bill has to confirm if the owners are the sole owners of the stadium or not to see if stadium operation actually coast that much. After all the disputes were cleared to each other, they can come up with more accurate