Kansas City Zephyrs

There are 5 items of dispute between the owners and the players. These items are :
1. Roster depreciation
2. Current roster salary
3. Amortization of signing bonuses
4. Non-roster guaranteed contract expense
5. Stadium operations
The owners claim that they are making losses in the financial years 2004- 2005 whereas players are calming that owners are using accounting tools to hide profits thereby depriving players of their rightful amount in compensation and other benefits. Each item of the dispute has been analyzed below to find out who is correct and why.

1. Roster Depreciation: I believe that the owner’s way of roster depreciation is apt and has no accounting flaw. Straight line depreciation is widely used across many types of business around the world. At the end of the useful life of the players, their accounting value will be zero. If there is no depreciation fund, the owners will have to spend additional amount to replace them by signing contracts with new players.

2. Current roster salary: I think players are correct here because only that part of the expense should be considered in the current year which has been actually paid out in current year only and should not include the future expenses. This is because no one knows whether both parties will be able to perform the contract next year or in future years. Some reasons of non-performance include:
• Owners/ Club go bankrupt.
• Players are bought by other clubs with amended contract
• New regulations from the government or other competent authority which makes the contract void.
• Player dies and has no legal heir.
3. Amortization of signing bonuses: In my opinion owners are correct here because the signing bonuses are paid at the time of signing the contract and it is not prudent to amortize it over the period of the contract. Only those parts of the