Kansas City Zephrys Baseball Club, Inc.

Topics: Major League Baseball, Salary, Baseball Pages: 2 (796 words) Published: October 18, 2013
Kansas City Zephrys Baseball Club, Inc. Case Study
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 at the time it is paid. What if the player dies or goes to jail? If that were to happen, God forbid, then they would not have to be responsible to pay those monies. This 20% should be a deferred expense since it is not been paid in the present time. More if the Zephryrs team is not setting that money aside. I would also agree with Mr. Hanrahan in that any salaries due to players are recognized when they are paid out and not when they leave the...
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