deciphering financial statements boston celtics in december of 2002 the boston celti 692479

Aug 30, 2021 | Uncategorized

Deciphering Financial Statements (Boston Celtics)

In December of 2002, the Boston Celtics were purchased by a private investment group. Now that the Celtics are owned by a private group, their financial statements are not publicly available. However, prior to their going private, their financial statements were publicly available. A portion of those financial statements (the Liabilities and Equity section of the balance sheet) is shown below. Celtics Basketball Holdings Limited Partnership was the name of the entity under which the results of the Boston Celtics were reported prior to their going private. Review the Liabilities and Equity section of the balance sheet and answer the following questions.

1. What is Deferred Game Revenues? How would that liability have arisen?

2. What does the account Deferred Compensation represent? Note that this account has both a current and noncurrent portion.

3. As of June 30, 2001, what did the Celtics report as total assets?

4. Consider your answer to part (3) in light of the $50,000,000 amount of outstanding notes payable. If you were a creditor of the Celtics, would you be concerned? How is it possible for the organization to continue to function with such a large partners’ deficit?

Celtics Basketball Holdings, LP Liabilities and Partners’ Capital (Deficit)

 

June 30, 2001

June 30, 2000

CURRENT LIABILITIES

 

 

Accounts payable and accrued expenses                       

$ 23,506,664

$ 24,478,303

Deferred game revenues                                   

6,498,726

9,204,607

Deferred compensation—current portion                      

1,226,316

1,278,410

TOTAL CURRENT LIABILITIES                                

 $ 31,231,706

 $ 34,961,320

NOTES PAYABLE TO BANK                                  

50,000,000

50,000,000

DEFERRED COMPENSATION—noncurrent portion               

5,182,821

6,369,646

OTHER NON CURRENT LIABILITIES                          

 

708,000

PARTNERS’ CAPITAL (DEFICIT)

 

 

Celtics Basketball Holdings, LP:

 

 

General Partner                                        

1,015

1,008

Celtics Pride GP—Limited Partner                          

(29,111,174)

(29,437,209)

Castle Creek Partners, LP—Limited Partner                  

(31,144,430)

(31,493,235)

 

 (60,254,589)

 (60,929,436)

Celtics Basketball, LP—General Partner                     

1,081

1,074

TOTAL PARTNERS’ CAPITAL (DEFICIT)                         

 $(60,253,508)

 $(60,928,362)