Submitted by: Submitted by texmexpower
Views: 289
Words: 651
Pages: 3
Category: Business and Industry
Date Submitted: 01/18/2013 12:16 AM
■Summary
activities:
Contracting for players
Promoting games
Selling Tickets
Arranging for the use of a stadium
Other needed facilities and services
Negotiating local broadcasting of games
annual revenues: $200 million and $300 million
Players:
Active roster: 25(highest paid player differed position 10years)
Minor leaue player and Disabled player: 15
Games:
162 games during the season
Owner was a corporation with five major shareholders
bought the team on November 1, 2003, for $228 million.
●Roster Depreciation
Player said
- The depreciation expense arises only when a team is sold, so you can have two identical teams
that will show dramatically different results if one has been sold and the other has not.
- The depreciation is real because most of the players actually improve their skills with experience, so if anything,
there should be an increase in roster value over time, not a reduction as depreciation would lead you to believe.
Owner said
- Followed the industry practice of allocating 50% of the purchase price to the value of the roster at the time.
228 * 0.5 / 6 = 19
Who is correct: The Players
Depreciation expense is for the tangible non-currnet assets.
As Player said, depreciation expense only arises when a team is sold and this value will be changed by
condtions of each playes or teams. To depreciate this value will cause underestimatation( some time overestimate ).
●Current Roster Salary - Signing bonus
Player said:
- Signing bonus should not be included as one time payment when it paid and should be spread over the term of the player's
contract since it is part of the compensation package.
Owner Said:
- Signing bonus should be expensed as incurred
Who is correct: The Players
The value of signing bonus is based on player's peformance for contracted periods and not just for one year.
This can be capitalized and amortized over that same period.
These values should not be...