Refer to the Kansas City Zephyrs reading from earlier in the week. For each of the 5 areas in dispute‚ answer the following: Who is right? Why? Submit your answers in your own Word document by the end of Week 1. Bill Ahem was asked to be an arbitrator in a major dispute regarding profitability between the Owner-Player Committee (OPC‚ the representatives of the owners of the 26 major League baseball teams in collective bargaining negotiations) and the Professional Baseball Players Association
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the Major League Agreement Major League Rules including signing‚ trading and dealing with players Elects a Commissioner to a seven-year term Protects the best interests of the game Administers the Major Leagues Central Fund Case Study: Kansas City Zephyrs Selected by both PBPA and OPC Chosen for representative nature Clean and simple financial example -not owned by a corporation (publicly owned) -does not own its stadium -private financial data will not be needed Points of Disagreement:
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Kansas City Zephyrs Case This case is a good example of the “earnings game”. A dispute arose between the baseball team owners and the players association on the true profitability of the baseball business. The case describes 3 main areas for which the accounting is being disputed: * Roster depreciation * Player compensation * Current Roster Salary - Deferred Compensation * Amortization of Signing Bonuses * Non-Roster Guaranteed Roster Expense * Transfer pricing of related party operations
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Kansas City Zephyrs Baseball Club‚ Inc Analysis of the Kansas City Zephyrs Baseball Club for 1983 and 1984. In reviewing the Kansas City Zephyrs Baseball Club‚ and hearing arguments from both the owners and player there have been some interesting findings. We see that both parties are motivated towards getting more actual cash flow for their respective sides. Using different accounting techniques resulted in two very different financial statements for the Kansas City Zephyrs Baseball Club.
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Maria Alvarez 1369152 The Kansas City Zephyrs The five areas under dispute between baseball owners and players are: 1. Roster depreciation 2. Current roster salary 3. Amortization of signing bonuses 4. Non roster guaranteed contract expense 5. Stadium operations Who is right? 1. Roster depreciation: The owners The owners capitalized and amortized 50% of the purchase price over six years because that is the maximum percentage allowed by the Internal Revenue Code
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KANSAS CITY ZEPHYRS BASEBALL CLUB‚ INC. There are several accounting conflicts that are to be addressed between the owners and the players. These issues all have to do with the profitability of the Kansas City Zephyrs. It would seem‚ based on the evidence presented by both sides‚ that the owners of the Zephyrs hiding or reducing large portions of profit by implementing several accounting tricks and that the financial statements do not accurately reflect just how much revenue the baseball club
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How should Bill Ahern resolve the accounting conflict between the owners and players? How much did the Kansas City Zephyrs Baseball Club earn in 1983 and 1984? Facts This case shows that how different accounting methods can lead a company to different positions. That is what Bill Ahern was selected on April 9 to focus on reviewing the finances of the Kansas City Zephyrs Baseball Club‚ Inc.‚ which was bought on November 1‚ 1982 by five shareholders for $24 million‚ because both the representatives
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Kansas City Zephyrs Baseball Club Roster Depreciation ✓ Economic Reality =US GAAP I agree that most of the players actually improved their skill with experience‚ so if anything‚ there should be an increase in roster values over time. So from the perspective of economic reality‚ this is valuable asset like intangible assets. This asset is similar to the good will. Under previous US GAAP‚ the goodwill should be depreciated but in new US GAAP‚ it has been changed not to be depreciated.
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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
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the Major League Agreement Major League Rules including signing‚ trading and dealing with players Elects a Commissioner to a seven-year term Protects the best interests of the game Administers the Major Leagues Central Fund Case Study: Kansas City Zephyrs Selected by both PBPA and OPC Chosen for representative nature Clean and simple financial example -not owned by a corporation (publicly owned) -does not own its stadium -private financial data will not be needed Points of Disagreement:
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