An Investigation into the Accounting Practices of Owners in the Professional Sport Industry with specific consideration of implications to Players, Taxpayers, and Local Governments
Honors Capstone Project
Date of Submission
Rodney Paul, Ph.D., Professor Sport Management
Sherryl Seigfreid, CPA Candidate, Audit Assistant at the Bonadio Group
Sport and Human Dynamics
Capstone Prize Winner
Won Capstone Funding
In today’s sport industry there is a push by players to maintain an equitable split in revenues to ensure ownership groups do not exploit them. This has been of particular importance over the past five years during collective bargaining agreements. Players associations are not the only groups who are affected by the financial management of professional sport owners. Taxpayers and local governments also share an interest in the manner owners operate teams. With an increase in public subsidization of sport teams, taxpayers have a natural vested concern for professional sports.
The concern on this topic comes with the financial management of professional sport teams by owners. There are documented uses of creative accounting practices by owners, which fatten their wallets while often times taking advantage of players, taxpayers, and local governments alike. Owners hide revenues and certain expenses to paint a picture of poor financial team health to the three parties in order to maximize player salary efficiency and public subsidization.
In an attempt to correct the current need owners feel to utilize creative accounting practices, this thesis developed a regression analysis to understand how their fans respond to cost structure of player contracts. As detailed in the latter portion of the thesis, fans of the MLB, NBA, and MLS all respond differently to salary structures; proposing a solution to increasing player cost efficiency.
Rathbun, Stephen Michael, "An Investigation into the Accounting Practices of Owners in the Professional Sport Industry with specific consideration of implications to Players, Taxpayers, and Local Governments" (2014). Honors Capstone Projects - All. 776.
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