A Professional Sports Team and Related Items (Including a Stadium)were

Essay

A professional sports team and related items (including a stadium)were bought by an exceedingly wealthy investor and sports fan. The negotiated price was $225,000,000. Details of what was purchased and the agreed fair values are as follows:
$$\begin{array} { | l | r | } \hline \text { Stadium } & \begin{array} { r } \text { Fair value in } \\\$ \text { millions }\end{array} \\\hline \text { Land } & 70 \\\hline \text { Cable TV broadcasting contract } & 20 \\\hline \text { Player contracts } & 91 \\\hline \text { Spectator leases on luxury viewing boxes } & 9 \\\hline \text { Product licensing agreements } & 17 \\\hline \text { Season ticker subscriber list } & 18 \\\hline \text { Contacts and commitments for use of stadium } & 24 \\\hline \text { The "team" imputed or residual value } & 225 \\\hline \text { Total } & 34 \\\hline\end{array}$$ The team has been less than successful in its professional sports league and has been recording losses of $1,000,000 to $8,000,000 per year on its audited financial statements for the past five years. It was these losses that prompted the last owner to sell the team and related assets.
Required:
a. There are several identifiable intangible assets noted on the list. Group these assets into three classes, being those that are
(i)easily measurable and identifiable;
(ii)reasonably measurable and identifiable; and
(iii)very difficult to measure and identify.
For each group, what common quality or feature of these items distinguishes their classification?
b. While all the items can be assigned a value, would you capitalize all these amounts?
Explain your conclusion.