Negotiations

Part I. You Against Them: Preparing for Your Negotiation

Key Topic: Negotiation Preparation and Research Methods

Negotiating a professional athlete’s contract is not about throwing out the biggest numbers or acting contentious “just because.” Experience is a critical part of negotiation, but preparation also helps drive the process. An experienced agent possesses the skills to endlessly research current contracts and statistics that prove why his or her client deserves a big contract. Research should include exact details of current contracts of other athletes and any bonuses and/or incentives. The research should also include how successful the athlete has been in his or her previous endeavors and contracts. General statistics of what is happening in the athlete’s specific sport are helpful to serve as a reference during negotiation. Having the ability to historically look at and analyze previous contracts will enable an agent to not only be prepared, but also drive up the contract.

While it may sound simple to compare general statistics of a client and other players, oftentimes, it takes long hours of being able to compare up to 50 players. From there, an agent might have to get really creative and research different statistic breakdowns such as situational statistics. In terms of football statistics and being creative, an agent may have to research specific playtime percentages for his defensive player in terms of pass/run downs. In baseball, it may even take the Wins Above Replacement (WAR) statistic in order to prove a player’s worth over the others. At the end, it is about finding out what the “market” is for players, and having to find out where a client fits within it.

Just because an agent can, without a doubt, prove that his or her client has similar statistics to players with better contracts, does not mean that he or she can find a simple pay day for his or her client. This often comes with lots of back and fourth negotiation of the two sides to come upon an agreement of a contract. Having patience throughout this process and then knowing when to pull the trigger in order to satisfy both sides allows for a win-win negotiation. Both sides leave the negotiation feeling good about themselves and victorious about the negotiation.


Part II. The Foundation: The Building Blocks for Effective Negotiating

Key Topic: Discussion on How You Should Negotiate a Player Contract With a Professional Sports Team

Every sports agent needs a foundation to build a negotiation on. An agent needs to be dedicated to researching the entire situation in order to prove his or her side of the negotiation. Sometimes, the agent may outsource this to an associate or junior agent assistant; or if the agent is at a larger firm, there may be an entire department dedicated to research and statistics. Much like a lawyer preparing for trial, a sports agent needs to research and perform various stages of due diligence to ensure that he or she is prepared to negotiate the playing contract or business opportunity. Historical precedents play a significant role in the agent’s ability to obtain a favorable number, but having the ability to come up with novel concepts or negotiation strategies will allow the agent to effectively negotiate the opportunity presented.

Example: During the 2015 NFL offseason, a well-respected NFL offensive lineman decided to make an agent change, to himself. This player wrote a public statement expressing his desire to forgo using the services of his previous agent and handle his own negotiation. However, instead of securing guaranteed dollars in his contract, his new contract obtained terms that rely on him staying healthy and playing at a high level, which both were not easily obtained in the previous season. This example pertains to a player believing that negotiating contracts is simple.

An experienced and successful agent, who understands all the complexities and language of the collective bargaining agreement, would be able to understand the importance of particular areas such as guaranteed money, as well as other payments to secure long-term status such as early roster and reporting bonuses, and other language that pertains to salary being guaranteed for injury.


Part III. Developing the Necessary Storytelling Skills to Be an Effective Negotiator and Knowing When to Use Your BATNA When Your Negotiation Is at an Impasse

Key Topic: Discussion of Why You Need to Always Be Prepared to Walk Away or Use Your BATNA to Resolve the Negotiation

In professional sports, it is all about comparing a market. Player statistics and contracts create the market that enable agents to prove, through creating comparisons of other players, to properly negotiate a deal. A comparable player analysis is a process used to evaluate the value of a player using the metrics of other players of similar stature within the same league. Providing statistical data, along with negotiation strategies, coupled with the right storytelling skills, will enable the agent to effectively position his or her player within the negotiation.

Not only do the player’s statistics and contracts serve as credible research, but also the player’s popularity and what he or she can bring to the table in terms of fan base, must be considered, among other variables.

Understanding the market is critical, and being able to dissect the market and free agent market cannot be understated. Preparation is key, and the agent must have the ability to research the statistics of players and the competitive landscape as a whole. If an agent can thoroughly research his or her client and multiple players’ in-depth statistical breakdowns, then the agent has to bring that over to their next step, knowing when to accept or move on. For example, a prominent quarterback, after leading his offense to some of its best performances in years, spent most of the off-season in back-and-forth negotiations with his team because of guaranteed money and contract length. During these negotiations, the quarterback market was contracting, as the rest of the league was signing other free agents and drafting rookies. This situation put the quarterback in a tough negotiation spot, where his only realistic option to negotiate was with his current team. Through a negotiation tactic coined Best Alternative To a Negotiated Agreement (“BATNA”), an agent must assess if the quarterback should have pulled the trigger earlier on, or instead, to walk and deal with other teams. Even though he could make arguments why his worth may be of high value to his team, the quarterback market devalued him and left him with very limited options as the season approached.


Part IV. The Settlement: When You Finally Negotiate the Terms of the Contract or Agreement

Key Topic: When You Get to the Finish Line and Need to Finalize the Negotiation

This is where an agent must have full communication and understanding with his or her client. Complete communication is necessary so that there are no surprises, and that both the agent and the client are on the same page. It is up to the agent to ensure that everything is fully communicated to the client, and that the client is approving of the terms. Full transparency and disclosure is a must between an agent and client.

An agent must explain the terms and reasoning for the contract. Once the contract is properly negotiated and explained, the agent and client are ready to sign the contract. Both parties need to avoid going into a deal and signing the contract without full disclosure. It is easier to communicate fully than to just assume, even if it seems timelier. In the long run, the agent’s relationship with the client is most important, and a client will appreciate over-communication as opposed to being left out of the loop. The agent should never assume that he or she knows the exact desires and contingencies of his or her client(s). It is best to err on the side of caution than it is to make assumptions and act on them. Throughout the process, and as a general rule, the agent must keep the client abreast of all or any developments within the negotiation process or run the risk of the player not signing the contract when at the finish line.

Not only could miscommunication cost a client lots of money, but it also can subject an agent to discipline from the players union for misrepresenting his or client. Aside from possible fines and/or suspensions, a bad contract negotiation can also severely damage an agent’s reputation, which can hurt his or her career in the long run. As a result, creating several scenarios in negotiations is very important. You must discuss all the best and worst case scenarios with your client(s). The client has to understand what the agent is negotiating on his or her behalf.