Over the last decade we have seen a drastic increase in professional baseball players’ salaries. It has become apparent that the salary increase for the players has had an effect on the overall expenses for the team. The credits decrease when there is an increase in debits. The net income formula is calculated by taking the revenues and adjusting for the cost. For example, if the cost is larger than the revenue then the income can be in negative. Companies must increase their revenues for positive net incomes. Baseball leagues are doing this my increasing admission prices, concessions, merchandise, and advertising to make enough for the players’ salaries (an expense for the team).
The Chicago Cubs Revenues and Expenses
Admissions (ticket sales)
Television and radio
Personally, I don’t feel that it is the fans’ responsibility to pay to offset the higher salaries, there are many other solutions the team can come up with. Regardless of the transaction total debits must equal total credits so that the accounting equation remains balanced (Kimmel et al., 2013).
Being the huge baseball fan that I am, I have seen these increases first hand. These revenues and expenses are essentially the same across the board in the MLB. The major expenses include the players’ salaries, administrative salaries, travel, and ballpark maintenance. To speak on the expenses, I truly believe that these increase every year as new talent arrises because teams are fighting over the new talent and want to present the best deal possible. This is causing major issues because the teams have a salary cap and are using a majority of it on one player and thus not being able to afford some of their other players and this is how we see players that have been with teams for YEARS become free agents or traded to a different team. This was a huge thing that happened in Cleveland this past year and in order to bring in the fresh new talent, we traded some of our team that has been with us from the start. The main revenues are admissions, concessions, television and radio, and advertising. As players are becoming more expenses, the fans are seeing increases in admission price and concession price and outside sources are seeing an increase in television and radio cost and advertising costs. It is almost becoming unaffordable to head to the ball park for a nice night because of all of these increases. Beers are over 12 bucks for a single one when at the store they are maybe 12 bucks for a six pack. As well as the food. Some expenses can be decreased like travel. The players can be transported on a normal airline in coach versus on a private jet or in first class.
At this rate, fans can expect a steady increase in pricing every year as the net income decreases due to the expenses.