Negotiations

In sports, there is little left unclear.  There is a final score.  There are winners and there are losers.  There is the thrill of victory, and there is the agony of defeat.

In the business of sports the latest evolution, at least at the corporate level, is to find win-win partnerships that are about mutual gain, as opposed to the older models of spending to purchase assets.   There are ways to create partnerships where everyone benefits from the associations and initiatives.

Ideally, the contract negotiations between athletes and the teams the play for would find similar common ground, but according to Ian Greengross, NFL Player Agent and Partner at Ultimate Sports Agency, that’s not always the case.  When it comes to applying the notion of principled negotiations to contract negotiations, Greengross says that “even those negotiations that are principled are still about leverage.  In the National Football League, teams almost always have the ability to force certain restrictions, like a franchise tag, so our negotiations are always about position and much less about principle.”

One of the primary issues that hampers principled negotiations in sports projects is that it is very difficulty to find objective criteria that can help create common ground.  Some positions, like offensive line, have few statistics.  Other positions can create players who are statistically poor but who provide other important pieces to victory.  In other words, objective stats don’t always provide the whole picture.  That said, the general spread of a contract is principled almost by definition.  As Greengross says, “It’s rare that we have a 7-million dollar difference between what a team thinks my player is worth, and what we think he’s worth.  Principle will set the range, but it’s the leverage that ultimately determines the final number.

Another big difference in athlete conference negotiations is there is a limited amount of supply and demand, and there is always a deadline.  There are various mechanisms in place that create a kind of artificial clock.  These instruments are designed to help players get under contract to the teams that first held their rights.  A player ultimately has a limited number of places in which he can sell his abilities.  This leads to difficulty for both sides as they attempt to create a BATNA.  Greengross says, “We HAVE to get to a resolution. There’s only two choices if we can’t agree – either I take their position or they take mine.”

All this being said, the way these deals get discussed in the media, fans might assume that player contracts are always contentious, difficult and full of dirty tricks.  Greengross says that’s not really the case.  He says most teams are “just trying to achieve their objectives.  They always want the player at the lowest reasonable price the team can accept.  My job is the converse, because it’s the highest dollar the team will reasonably accept.  Somewhere in between the competing forces we get a deal done.”

In the end, there’s simply too much at stake for men to behave badly.  If a team lies about giving a player an opportunity, or if a team rescinds an offer without giving a player and his agent fair warning, that bad acting will have residual effects.   To the agent, that indicates that the team, or that particular representative of the team, is untrustworthy going forward.  Ultimately, Greengross says,  “In a limited supply pool, I control some of the supply, and it not only affects future negotiations with this particular player, but of all of my future players because I can’t trust them.”

So in the cutthroat world of professional sports contract negotiations, the point is that the theory of principled negotiation can be effective, but only to a point.  The structure of the system ensures that principled negotiations will set the parameters of almost all contract discussions.  There’s too much at stake to do otherwise.  But when it comes down to the final completion of the deal, outside forces often cause sides to take up hard positions.  Ultimately, the leverage inherent in the market will determine which side wins out.