Solved: Hamilton Hawks Players Association and Mr

Sideline the CEO and

Hamilton Hawks Players' Association and Mr. Sideline, the CEO and majority owner of Hamilton
Hawks Soccer, Inc, ask your help in resolving a salary dispute. Mr. Sideline presents the
following income statement to the players' representatives.

HAMILTON HAWKS SOCCER, INC.

Income Statement

Ticket revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,500,000

Stadium rent expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,500,000

Ticket expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30,000

Promotion expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80,000

Player salaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 700,000

Staff salaries and miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . 265,000 . . . . . . 3,575,000

Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$ (75,000)

The players contend that their salaries are below market and a raise is warranted. Mr. Sideline
argues that the Hamilton Hawks 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 Hamilton Hawks Soccer Company owns 85 percent
of the voting stock in Hawks Stadium, Inc. This venue is specifically designed for soccer and is
where the Hawks play their entire home game schedule. However, Mr. Sideline does not wish to
consider the profits of Hawks 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 Hawks Stadium income statement appears as follows:

Required

1. What advice would you provide the negotiating parties regarding the issue of considering the

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 Hawks 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?

Hamilton Hawks Players Association and Mr Sideline the CEO and

ANSWER
https://solvedquest.com/hamilton-hawks-players-association-and-mr-sideline-the-ceo-and/

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