The A-Rod Saga Makes a 1st Class Negotiation Case
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If you’re a baseball fan, or simply a negotiation fan, you can’t help but pay attention to the contract saga of that multi-multi-multi-millionaire, Alex Rodriguez.
For years, he has been the highest paid player on any team in Major League Baseball, having inked a deal with the Texas Rangers that promised to pay him more than $250 million dollars over 10 years.
Despite his prowess, A-Rod never got the Rangers to the World Series, so he was traded to the New York Yankees. The Rangers, as part of that deal, subsidized A-Rod’s Yankee contract, forking over several million a year to jettison his upkeep.
A-Rod didn’t bring the Yankees a World Championship, either, but last season he had an amazing personal record, hitting 54 home runs. So, in the 8th year of his 10 year contract, he opted-out of finishing the 10 year deal, foregoing about $30 million in sure income to test his value on the free market.
Reportedly, his agent told the Yanks that they had to agree to pay A-Rod a minimum of $350 milllion simply for the privilege of negotiating with this great player, despite the fact they had a pre-existing relationship–he had been their guy for the last four years.
The Yanks declined, calling the agent’s’ bluff.
A few weeks ensued, and apparently, no other team chomped at the bit to negotiate with Rodriguez. Lots of franchises said they had better ways to spend $35 million per year.
It started to appear that the Yanks were the only team willing to offer A-Rod anything close to the deal he wanted, originally.
Today, A-Rod spoke to the Yankees without his agent, in tow. The sports pages are filled with speculation, inferring A-Rod will have to eat the $30 million dollars he threw away by opting out of his original 10 year contract, so impulsively.
This chain of events brings up a major negotiation question: If your initial demand seems outrageous or detached from reality, will your counterpart be likely to throw up his hands and walk away, without even countering your opener?
The answer is a resounding YES, as the Rodriguez saga seems to demonstrate.
Through his representative, Rodriguez made an ultimatum as his initial gambit, which is highly defensive and dangerous. It says, “Give me what I’m demanding, or else!”
People tend to reply, “Forget about it!” which seems to have been the Yankees’ response.
We don’t ever want to corner a counterpart with this sort of demand, especially as the first move in a negotiation. No matter how powerful our bargaining power seems, sometimes we cannot afford to alienate the best available negotiation partner.
As a general rule, offers need to seem reasonable and relevant, and they should be delivered respectfully, unless we’re purposely creating distance as a ploy.
With the biggest payroll in the majors, and with the willingness to “spend what it takes” to create a World Champion, the Yankees are unique. But once they said they were no longer in the hunt, A-Rod’s market value probably plummeted.
Teams that were going to step-up were few in number, and believing Rodriguez had burned a bridge to the Yanks, the negotiation style of subsequent suitors would have been a hardball experience, to say the least.
Realizing this, the only face-saving thing Rodriguez could do was to re-approach the Yanks, if he wanted to be paid anything close to his asking price, while sparing himself the humiliation of having to consider offers that may have been less attractive than the 10 year deal he decided not to finish.
Are you looking for the Best Practices in Negotiation, in sales, customer service, or telemarketing training? Contact us.
Dr. Gary S. Goodman is a top trainer, conference and convention speaker, and sales, customer service, and negotiation consultant. A frequent expert commentator on radio and TV, he is also the best-selling author of 12 books, more than 1,000 articles and several popular audio and video programs. His seminars are sponsored internationally and he is a faculty member at more than 40 universities, including UC Berkeley and UCLA. Gary’s sales, management and consulting experience is combined with impressive academic credentials: A Ph.D. from USC, an MBA from the Peter F. Drucker School of Management, and a J.D. degree from Loyola Law School, his clients include several Fortune 1000 companies.
His web site is: http://www.customersatisfaction.com and he can be reached at:
gary@customersatisfaction.com His blogs include: YOUR CUSTOMER SERVICE SUCKS! and ALWAYS COLD CALL! at: http://www.alwayscoldcall.blogspot.com
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