Kansas City Zephyrs Baseball Club Case Response

Kansas City Zephyrs Baseball Club Case Response

The Professional Baseball Players Association (PBPA) and the Owner-Player Committee (OPC) were involved in collective bargaining dispute because the PBA believed that they should share in the teams' profits. The OPC claimed that the teams were losing money each year. Thus they brought in an independent arbitrator to evaluate the situation and determine which side was right.

The following are the areas are the accounting areas being disputed:

1. Signing Bonus expense

2. Deferred Compensation

3. Injured player Compensation

4. Roster Deprecation vs. Appreciation

5. Stadium Operations

Signing Bonus

The issue being disputed regarding signing bonus expense, in this case the owners want to expense the cash that is paid out. The players argue that the bonus expense should have been recorded in the financial statements throughout the life of the players contract. I would agree with the owners in this case that this is a one-time expense that should be reflected in the financial statement when the expense is realized.

Deferred Compensation

In The case of deferred compensation, I believe that the players are correct because the expense should not be recorded until the cash is actually paid out.

Injured Player Compensation

I agree with the owners recording injured player compensation expense now, because the team will no longer benefit for the performance of the player if they are unable to play. Thus, the owners should record the expense immediately since the injured