Kansas City Zephyrs Case #1

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WHO IS RIGHT? Before reading the case of the Kansas City Zephyrs I had the same thought process as the arbitrator Bill Ahearn. I figured that after hearing from both sides (the owners and the players) that some simple surveying of the financials that both sides presented would lead to a simple answer and ruling. However, this was not the case. Both the players and the owners presented lots of good detailed information illustrating their side of the argument. Upon lots of review, I have decided that I think the players are right in their argument. They presented interesting truths that suggest to me that the owners are both trying to hide some significant income, and, not defer a great deal of player salary (as they should be). WHY? If you study the case, especially as it relates to player salary and to owner generated income from stadium operations it is clear that the owners are doing everything they can to at a minimum, have a yearly balance of zero. However, in this case, the owners show a net overall loss. I feel this is because they are hiding income in stadium operations, and, paying salary that will be received over a long period of time (deferred salary to some players). Stadium Operations-Two of the owners are involved in the stadium corporation, and, they are the owners of that stadium company. They are overcharging themselves on rent of the Zephyrs stadium. This allows them to receive significant rental incomes, and, make it so the baseball club has less of an overall income. In some ways this is a conflict of interest. These owners seem to be “double dipping”. Player salaries-Players who receive “deferred payment” are only paid a portion of their salary in 1984. However, the team includes a charge for the entire amount to be paid to the players, including the amount to be deferred over the next several years. In my opinion, the amount

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