Case | HBS Case Collection | August 2009 (Revised June 2011)

Kansas City Zephyrs Baseball Club, Inc. 2006

by Krishna G. Palepu

Abstract

This case centers around a dispute between the owners and the players regarding the profitability of professional baseball teams in connection with the negotiations for a new collective bargaining agreement. The case describes the financial statements of the baseball club Kansas City Zephyrs and discusses several items whose accounting treatment is under dispute between owners and players. Students are asked to resolve these disagreements and determine the team's "true" profitability. The discussion reveals the tensions in performance measurement and illustrates the fundamental issues in accrual accounting. The case is best used as an introductory case in a course on financial reporting or performance measurement.

Keywords: Accrual Accounting; Financial Statements; Profit; Labor Unions; Measurement and Metrics; Agreements and Arrangements; Performance; Sports Industry; United States;

Citation:

Palepu, Krishna G. "Kansas City Zephyrs Baseball Club, Inc. 2006." Harvard Business School Case 110-022, August 2009. (Revised June 2011.)