Granger Eagles Player's Association and Mr. Doublecount, the CEO of Granger Eagles Baseball Company, ask your help in resolving a salary dispute. Mr. Doublecount presents the following income statement to the player representatives.

Granger Eagles Baseball Company Income Statement

Ticket Revenues		2,000,000.00
Stadium Rent Expense	1,400,000.00
Ticket Expense	25,000.00
Promotion	35,000.00
Player Salaries	400,000.00
Staff Salaries and Miscellaneous	200,000.00	(2,060,000.00)
Net Income(Loss)		(60,000.00)

Mr. Doublecount argues that the Granger Eagles really lose money and, until things turn around, a salary increase is out of the question.

As a result of your inquiry, you discover that Granger Eagles Baseball Company owns 91% of the voting stock in Eagle Stadium, Inc. This venue is specifically designed for baseball and is where the Eagles play their entire home game schedule. However, Mr. Doublecount does not wish to consider the profits of Eagle Stadium in the negotiations with the players. He claims that "the stadium really is a seperate business entity that was purchased seperately from the team" and therefore does not concern the players. The Eagle Stadium income statement appears as follows:

Eagle Stadium, Inc Income Statement

Stadium Rent Revenue	1,400,000.00
Concession Revenue	800,000.00
Parking Revenue	100,000.00	2,300,000.00
Cost of Goods Sold	250,000.00
Depreciation	80,000.00
Staff Salaries and Miscellaneous	150,000.00	(480,000.00)
Net Income (Loss)		1,820,000.00

1. What advice would you provide the negotiating parties regarding the issue of considering the Eagle Stadium income statement in thier discussions? What authoritative lierature could you cite in supporting your advice?

2. What other pertinent information would you need to provide a specific recommendation regarding player's salaries?