Kansas City Zephyrs Baseball Club, Inc. 2006

Case Solution

Krishna G. Palepu
Harvard Business School ()

In this case, there is a dispute between owners and players about the profitability of professional baseball teams in the context of the negotiation of a new collective agreement. The case describes the financial statements of the Kansas City Zephyrs baseball club and discusses several issues whose accounting treatment is controversial between owners and players. Students are asked to resolve these disagreements and determine the “true” profitability of the team. The discussion shows the strains in measuring success and clarifies the fundamental issues of accrual (or accrual) accounting. The case is best suited as an introductory case in a financial reporting or performance measurement course.

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