The Edison Eagles Players' Association and Mr. Sideline, the CEO and majority owner of Edison Eagles...

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The Edison Eagles Players' Association and Mr. Sideline, the CEO and majority owner of Edison Eagles Soccer, Inc., ask your help in resolving a salary dispute. Mr. Sideline presents the following income statement to the players' representatives. EDISON EAGLES SOCCER, INC. Income Statement Ticket revenues $3.500,000 Stadium rent expense Ticket expense Promotion expense $2,500,000 30,000 80,000 Player salaries Staff salaries and miscellaneous Net income (loss) 700,000 265,000 3.575.000 S (75.000) The players contend that their salaries are below market and a raise is warranted. Mr. Sideline argues that the Edison Eagles really lose money and, until ticket revenues increase, a salary hike is out of the question. As a result of your inquiry, you discover that Edison Eagles Soccer owns 85 percent of the voting stock in Eagles Stadium, Inc. This venue is specifically designed for soccer and is wtiere the Eagles play their entire home game schedule. However, Mr. Sideline does not wish to consider the profits of Eagles Stadium in the negotiations with the players. He clnimis that "the stadium is really a separate business entity that was purchased separately from the team and therefore does not concern the players. On top of that, we allocate all the ticket revenues to the team's income statement." The Eagles Stadium income statement appears as follows: As a result of your inquiry, you discover that Edison Eagles Soccer owns 85 percent of the voting stock in Eagles Stadium, Inc. This venue is specifically designed for soccer and is where the Eagles play their entire home game schedule. However, Mr. Sideline does not wish to consider the profits of Eagles Stadium in the negotiations with the players. He claims that "the stadium is really a separate business entity that was purchased separately from the team and therefore does not concern the players. On top of that, we allocate all the ticket revenues to the team's income statement." The Eagles Stadium income statement appears as follows: EAGLES STADIUM, INC. Income Statement Stadium rent revenue $2,500,000 Concession revenue 875,000 Parking revenue Cost of goods sold Depreciation expense Grounds maintenance expense Staff salaries and miscellaneous Net income (loss) 95,000 270,000 $3,470,000 190,000 410,000 200,000 1,070,000 $2.400,000 Required 1. What advice would you provide the negotiating parties regarding the issue of considering the Eagles Stadium income statement in their discussions? What authoritative literature could you cite in supporting your advice? 2. What other pertinent information would you need to provide a specific recommendation regarding players' salaries? The Edison Eagles Players' Association and Mr. Sideline, the CEO and majority owner of Edison Eagles Soccer, Inc., ask your help in resolving a salary dispute. Mr. Sideline presents the following income statement to the players' representatives. EDISON EAGLES SOCCER, INC. Income Statement Ticket revenues $3.500,000 Stadium rent expense Ticket expense Promotion expense $2,500,000 30,000 80,000 Player salaries Staff salaries and miscellaneous Net income (loss) 700,000 265,000 3.575.000 S (75.000) The players contend that their salaries are below market and a raise is warranted. Mr. Sideline argues that the Edison Eagles really lose money and, until ticket revenues increase, a salary hike is out of the question. As a result of your inquiry, you discover that Edison Eagles Soccer owns 85 percent of the voting stock in Eagles Stadium, Inc. This venue is specifically designed for soccer and is wtiere the Eagles play their entire home game schedule. However, Mr. Sideline does not wish to consider the profits of Eagles Stadium in the negotiations with the players. He clnimis that "the stadium is really a separate business entity that was purchased separately from the team and therefore does not concern the players. On top of that, we allocate all the ticket revenues to the team's income statement." The Eagles Stadium income statement appears as follows: As a result of your inquiry, you discover that Edison Eagles Soccer owns 85 percent of the voting stock in Eagles Stadium, Inc. This venue is specifically designed for soccer and is where the Eagles play their entire home game schedule. However, Mr. Sideline does not wish to consider the profits of Eagles Stadium in the negotiations with the players. He claims that "the stadium is really a separate business entity that was purchased separately from the team and therefore does not concern the players. On top of that, we allocate all the ticket revenues to the team's income statement." The Eagles Stadium income statement appears as follows: EAGLES STADIUM, INC. Income Statement Stadium rent revenue $2,500,000 Concession revenue 875,000 Parking revenue Cost of goods sold Depreciation expense Grounds maintenance expense Staff salaries and miscellaneous Net income (loss) 95,000 270,000 $3,470,000 190,000 410,000 200,000 1,070,000 $2.400,000 Required 1. What advice would you provide the negotiating parties regarding the issue of considering the Eagles Stadium income statement in their discussions? What authoritative literature could you cite in supporting your advice? 2. What other pertinent information would you need to provide a specific recommendation regarding players' salaries?

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