...Introduction and Background This case shows different aspects relating to accounting and how they can create an atmosphere of controversy. The problem arises since the owners of baseball team and the players associations are negotiating the collective agreements, with the result of these negotiations both parts could measure how profitable it can be the business of baseball itself. The case describes five areas in which accounting are in dispute: 1. Roster Depreciation 2. Current Roster Salary 3. Amortization of Signing Bonuses 4. Non-roster Guaranteed Contract Expense 5. Stadium Operations Answers for Who's correct and why? 1. Roster Depreciation The players are correct, since the player roster in a baseball club is the most valuable intangible asset, and this asset can be appreciated and depreciated in the time for different reasons, e.g. good scouting, marketing contracts, and good performance increase the roster value. In contrast, injuries and retirements decrease the value because the list of names of the players is constantly changing. Also the team revenues are influenced by the performance of their players, as better the team is playing more fans come to the games. 2. Current Roster Salary The owners are correct because deferred salaries should be expensed in the year in which they are earned; the revenue for the team comes through ticket sales and marketing of the team. The Players suggestion that the deferred compensation expenditure should be expensed...
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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 (stadium costs) Roster Depreciation 1. Who is Right? The Players 2. Why? The owners capitalized and amortized 50 percent of the purchase price ($12 million) simply because the tax rules allowed it; therefore the depreciation was spread over six years and comes to a total of $2M deduction in income per year. However the players argue that they become more experienced over time, therefore no depreciation is necessary; instead, they argue, given this fact there should be an appreciation of the roster and not the other way around. The truth is that Revenues are influenced by the performance of players as the better the team does, the more fans come. Therefore, player rosters both appreciate and depreciate depending on the season and the overall success of the team including; new recruits, season statistics (wins/losses) etc, therefore it shouldn’t be a consistent depreciation simply because the IRS allows it, but should reflect the actual situation in any...
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...when you know that part of your tax money is going towards the building of a new ballpark in your area. Within ten minutes of my house in Kansas City, Kansas we have had two stadiums built within the last 12 years, Sporting KC Park (MLS) and Community America Ballpark (minor league baseball). Sporting KC park was built using STAR bonds (only available in Kansas and Nevada) and according to the Kansas Department of Commerce, sales tax revenue (STAR) bonds provide Kansas municipalities the opportunity to issue bonds to finance the development of major commercial, entertainment and tourism areas, and use the sales tax revenue generated by the development to pay off the bonds (Rishe, 2015). Sporting KC had a season ticket base of just under 14,000 for a facility that seats approximately 18,500. That’s roughly 75% of capacity, which is pretty damn good for Major League Soccer. Sporting KC drew an average of 105% of their capacity in 2012 for a 9% increase over their inaugural year at Sporting KC Park (Rishe, 2015). Community America Ballpark was built with the use of private funds. In 2013 the Unified Government of Wyandotte County purchased the Stadium from Ehlert Development. In doing so they will also use STAR bonds for an $8 million renovation (Babbitt, 2015). More than 265,000 fans attended games at the park in 2013, and the Kansas City T-Bones are said to generate over $5.5 million a year to economically benefit Wyandotte County. More than $650,000 has also been given by The...
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...For the Kansas City Zephyrs, answer and submit these two questions for each item in dispute: Who's correct and why? Roster Depreciation The owners. From 1977 to 2004, sports team owners were allowed to treat 50 percent of the team purchase price as an asset depreciable over no more than 5 years. Deferred portion (20%) of compensation The owners. It is an accrued expense, The Company may owe its own players’ salaries and wages for work performed, but not yet paid. Even though they are to be paid at some future date, they are indicated on the firm's balance sheet from when the firm can reasonably expect their payment, until the time they are paid. Singing bonus The players. Signing bonuses have to be capitalized and amortized over the lives of the contracts. This is because players are signed to play for the team to provide benefits over the lives of their contracts. Non-roster guaranteed payment The players. Payments to the non-roster guaranteed contracts should be expensed when they are paid. A provision has to be set up. A reliable estimate has to be made of the amount of the obligation based on the past history on probability of players getting injured and not being picked by another team. Stadium rent The owners. The stadium pricing agreement would have to go through a market valuation to see if it provided transparency and accuracy. As related party transactions cannot be presumed to be carried out on an arm's-length basis unless such representations can be...
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...Chad Dellworth Case: Kansas City Zephyrs Baseball Club: A Baseball Accounting Dispute ACCT 6350 1. How Should Bill Ahern resolve each of the accounting conflicts between the owners and the players? After meeting with both the owners and the players, Bill concludes that the three main accounting areas of concern between both parties are: * 1) Roster depreciation * 2) Player compensation * 3) Owners’ stadium fees In all of three of these conflicts, I noticed that the players tend to make more assumptions about the owners’ intentions than they do factual statements regarding sound accounting principles. I only mention this because Paul, the players’ lawyer, felt that the owners were being greedy and “hiding” profit in their accounting books rather than split their extra income with the players. According to our class reading Accounting for Property, Plant, and Equipment and Other Assets, all assets—in this case being the players—have a depreciation value. Unfortunately, PBPA goes against this statement by claiming that the players shouldn’t be depreciated at all; in fact, they went as far as to say that the players add value if anything. Now I don’t exactly claim to be an expert on baseball myself, but I know enough to safely say that baseball players tend to wear down over time. For example, pitchers are known for having shorter careers by throwing out their arm. Therefore playing baseball has to be taxing, not to mention risky. If anything, baseball...
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...Roster Depreciation The owners. From 1977 to 2004, sports team owners were allowed to treat 50 percent of the team purchase price as an asset depreciable over no more than 5 years. Deferred portion (20%) of compensation The owners. It is an accrued expense, The Company may owe its own players’ salaries and wages for work performed, but not yet paid. Even though they are to be paid at some future date, they are indicated on the firm's balance sheet from when the firm can reasonably expect their payment, until the time they are paid. Singing bonus The players. Signing bonuses have to be capitalized and amortized over the lives of the contracts. This is because players are signed to play for the team to provide benefits over the lives of their contracts. Non-roster guaranteed payment The players. Payments to the non-roster guaranteed contracts should be expensed when they are paid. A provision has to be set up. A reliable estimate has to be made of the amount of the obligation based on the past history on probability of players getting injured and not being picked by another team. Stadium rent The owners. The stadium pricing agreement would have to go through a market valuation to see if it provided transparency and accuracy. As related party transactions cannot be presumed to be carried out on an arm's-length basis unless such representations can be substantiated. If the stadium pricing agreement however is based on arm lengths principle and valued at market...
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...Kansas City Zephyrs Case Study Chad Dellworth Case: Kansas City Zephyrs Baseball Club: A Baseball Accounting Dispute ACCT 6350 1. How Should Bill Ahern resolve each of the accounting conflicts between the owners and the players? After meeting with both the owners and the players, Bill concludes that the three main accounting areas of concern between both parties are: * 1) Roster depreciation * 2) Player compensation * 3) Owners’ stadium fees In all of three of these conflicts, I noticed that the players tend to make more assumptions about the owners’ intentions than they do factual statements regarding sound accounting principles. I only mention this because Paul, the players’ lawyer, felt that the owners were being greedy and “hiding” profit in their accounting books rather than split their extra income with the players. According to our class reading Accounting for Property, Plant, and Equipment and Other Assets, all assets—in this case being the players—have a depreciation value. Unfortunately, PBPA goes against this statement by claiming that the players shouldn’t be depreciated at all; in fact, they went as far as to say that the players add value if anything. Now I don’t exactly claim to be an expert on baseball myself, but I know enough to safely say that baseball players tend to wear down over time. For example, pitchers are known for having shorter careers by throwing out their arm. Therefore playing baseball has to be taxing, not to mention...
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...KANSAS CITY ZEPHYRS BASEBALL CLUB This case illustrates some basic accounting issues in a controversial setting. There are two parties in the case, which are Owner-Player Committee (OPC) – owners’ representative of the 26 major baseball league teams in collective bargaining negotiations and Professional Baseball Association (PBPA) – the player’s union. As we know, the baseball team owners and the players association were engaged in collective bargaining negotiations, so Bill met with Keith (Zephyrs' Owner) and Paul (player). In my view, I think Paul (the player) is right, and I want to explain in 5 areas as following: Roster Depreciation The owners point out depreciation on the player roster at the time the baseball club was purchased. 50 percent of the purchase price is designated as the value of the player roster at that time. This amount was capitalized and is being amortized over six years. He disagrees that the depreciation is real, because he thinks that most of the players actually improve their skills with experience. The value of player rosters appreciates and depreciates over time. I agree that the roster appreciates as the players become more experienced. Good trades and coaching will increase the roster value, but injuries and retirements will decrease it. Overstated Player Salary Expense 1、Amortization of Signing Bonuses The players think the owners overstate player expense in several ways, so Paul comes up with 3 adjustments. One is...
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...Fe railway, sleeping in hobo camps. He went back to the family's farm in 1906 and enlisted in the army 1917. During this time period he courted Bess Wallace and proposed to her in 1911. She turned him down and he said that before he tried again he wanted to make more money than a farmer. He was the most recent president that did not earn a college degree. He enrolled in Spalding’s commercial college, a Kansas business school but dropped out after the first semester for the military. He always wanted to go to the United States Military Academy at West Point but was not allowed to have an appointment because of his poor eyesight. He enlisted in the Missouri army national guard by memorizing the eye chart. When the United States entered the Great War, he returned to the guard and to his surprise the men voted him to be an officer, which made him first lieutenant. He trained in camp Doniphan, fort sill, near Lawton Oklahoma. He ran the camp with Edward Jacobson, a clothing store clerk he knew from Kansas City. Truman met Lieutenant James m. pendergast, a political boss in Kansas City which would have a big influence on Truman’s life later on. After the war he became a United States senator from Missouri. He was there from January 3, 1935 – January 17, 1945. He became the 34th vice president on January 20, 1945 – April 12, 1945. The president at that time was Franklin d. Roosevelt. Harry Truman was in the Democratic political party. When he came into office he did not have a vice...
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...01/20/13 Department of Homeland Security/USCIS 2901 Metro Drive Suite 100 Bloomington, MN 55425 To Whom It May Concern: I am a student requesting reinstatement to F-1 student status. I plan to enroll at Penn Valley Community College, Kansas City Missouri for full-time study during the Spring 2013 semester. I realize that I have failed to maintain my full-time F-1 student status and would like to explain the circumstances, beyond my control, which prevented me from enrolling in full 12 credit hours of undergraduate program at Park University last semester. Due to extreme sickness resulted from not being used to the weather changing, I had been absent from class longer than 2 weeks and wasn’t able to contact the teacher which I deeply regret. This had conflicted with school policy so I was administrative withdrew from classes. I wasn’t aware of the seriousness of this situation after I returned from school and being told that I was no longer in my registered classes. I had contacted the international office at my school then to get this problem resolved but it was too late so I couldn’t sig n up for new classes to replace the classes which were missing. I tried to apply for admission at Penn Valley Community College and got accepted and this letter was required to complete the admission process. I’d like to state that I was not being out of status for more than 5 months and I file this reinstatement letter as soon as possible under these circumstances and failure...
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...game, some commentary from the analysts of what needs to happen in the second half, and the recaps of the games earlier in the day. That was all the usual stuff that happens in a halftime show. But, what we were then exposed to was a two minute speech by Bob Costas regarding the issue of gun control in America. Even my young son asked, “Why is that man talking about guns?” Wow! At his young age of 6, he recognized the power of influence without even realizing it. One issue propagating another. To summarize the tragic events that occurred earlier in the week would be to say that a man killed his girlfriend then committed suicide. If that were the case, this story would never have hit the national stage and Bob Costas would not have had an avenue to voice his liberal agenda. What did happen was; Jovan Belcher, a player for the Kansas City Chiefs football team, was extremely distraught. And, it is noteworthy to say was intoxicated at the time, shot his girlfriend who later died at the hospital. Then, drove himself to the Chiefs practice facility where he was confronted by police, security and team officials. He then turned the gun on himself and committed suicide. For Bob Costas to use his position as a sports broadcaster to editorialize his beliefs or promote some liberal agendas on a nationally televised sports event on a totally unrelated topic such as gun control during a sporting event was extremely unethical and irresponsible. Not only did he try to turn this instance into...
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...Kansas City Zephyrs Baseball Club, Inc. Case Study Antecedents: the Professional Baseball Players Association (PBPA) and the Owner-Player Committee (OPC) were engaged in a collective bargaining dispute where the PBPA believes they should share in the teams' profits. The OPC maintains, however, that the teams were losing money each year. Both sides had independent meetings with an arbitrator to evaluate and recommend a viable decision ”Who is right?” The case illustrate major areas in which both sides disputed the way the financial information is been presented, and the way key accounting concepts had been used taking in consideration the recognition of revenues and the matching concept: 1. - Players salary expenses, current roster salary, amortization of signing bonuses and non-roster guaranteed contract expenses 2. - Roster depreciation expense 3. - Related-party transactions (Stadium operations) 1. - Players salary expenses, current roster salary, amortization of signing bonuses and non-roster guaranteed contract expenses. A significant portion of players’ compensation packages is not paid in cash immediately. PBPA think the salaries due to players who are no longer on the roster should be recognized when the cash is paid out and not when the players leave the roster, GAAP however only allow the deferred compensation to be expensed when earned. Therefore, OPC is right. Some part of players’ signing bonuses as per the PBPA suggestion should be spread over...
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...Kansas City Zephrys Baseball Club, Inc. Case Study Issue: The PBPA believes the OPC should share with the baseball players the profits of the major league baseball teams Who is right? & Why? Roster depreciation Regarding roster depreciation, I would agree with the PBPA lawyer, Mr. Hanrahan, that depreciation expense should not be included in the income statement of the team since there are no plans on selling the equipment, only plans of sharing profits with the team players. Besides, experience can definitely add value to the team and increase revenue for the team. The better the players become, the better the games, the better the games, the greater the audience. Who is right? & Why? Overstated player salary expense Spreading players’ bonuses over the length of the player’s contracts would effectively reduce the Salary Expense per year for the team and better distribute salary expense over the player’s contract, but that would effectively defeat the purpose of the bonus. In my opinion, the transaction has to be recorded when it happens. Those bonuses are paid in the signing year of the player to motivate the player to play good. Changing this would be a very controversial issue since many players may want to get their bonus in advanced. Although, I don’t agree with distributing the player’s bonuses over the life of the contract like Mr. Hanrahan proposes, I would definitely agree with him that right thing to do is to report only the Salaries paid to the players...
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...Economic Impact of a Casino in Wyandotte County, Kansas It is estimated that more than a quarter of the U.S. adult population, 56 million people, visit casinos annually. Making over 371 million trips to casinos, Americans spend $30 billion each year in these facilities. Casinos also employ over 360,000 people and contribute more than $5.2 billion annually in direct gaming taxes to state and local governments. Casinos are favored by politicians for several reasons; gaming taxation being one of the main reasons. Casino revenue is taxed at a much higher rate than other types of businesses. However, the economic impact of casinos is dependent on the location and surrounding population base. Casino spending displaces spending that would occur elsewhere in the local economy. [pic] The purpose of this study is to evaluate the cost and benefits of the impact of a destination casino resort in Wyandotte County, Kansas. There are several proposals in the mix for building this facility near the Kansas Speedway, Cabela’s, and the Legends Shopping Center. In an article in the KansasCityKansan.com on Wednesday, March 19, 2008, it was reported that one of the groups who has a proposal for the casino, Sands Kansas, LLC, is hosting a job fair long before they have received final approval from the Kansas Lottery Commission. This group is proving that they are serious about their proposal and are going to great lengths to engage women and minorities. We will evaluate...
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...address is 3214 Benton Blvd., Kansas City, KS 66105-2843. WITNESS, for and in consideration of the sum of EIGHTY-SEVEN THOUSAND and 00/100 DOLLARS ($87,000), Grantor does hereby GRANT to Grantee, all of the following real property lying in the County of Wyandotte, State of Kansas, and described as follows, to wit: Lots Fifteen (15) and Sixteen (16), Block Sixty-three (63), Original Townsite of Kansas City, Kansas, SUBJECT TO mineral conveyances, easements, special or improvement taxes and assessment, rights-of-way, and reservations of record. (THIS DEED IS IN FULFILLMENT OF THAT CERTAIN CONTRACT FOR DEED ENTERED INTO BY AND BETWEEN THE SAME PARTIES ON THE DATE HEREOF.) And the said Grantor for herself, her heirs, executors and administrators, does covenant with the Grantee that she is well seized in fee of the land and premises aforesaid and has the right to sell and convey the same in manner and form aforesaid: that the same are free from all encumbrances, except assessments for special improvements which have not been certified to the County Treasurer for collection or installments of special assessments, and the above lands and premises in the possession of said Grantee, against all persons lawfully claiming or to claim the whole or any part thereof, the said Grantor will warrant and defend. WITNESS, the hand of the Grantor. _______________________________________ Alicia R. Carpenter STATE OF KANSAS County of Wyandotte ...
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