Who’s on first?

There’s an old Abbott and Costello vaudeville routine that has become a reality. For awhile, we didn’t know who was on first.

Spring training is weeks away and Prince Fielder just got to first base. Since Fielder became a free agent after last season his agent, Scott Boras, has maintained that the former Milwaukee Brewers slugger was as valuable an asset as Albert Pujols, who was signed by the Los Angeles Angels to a 10-year, $240 million contract.

Some would agree with Boras about his client’s value. But baseball team owners did not, and the negotiations dragged on through most of the offseason.

Initially, the owners were telling Boras that he made an error comparing the Prince to Pujols and then saying his client was worth Pujols money.

But the Detroit Tigers stepped up with their checkbook and have agreed to pay Prince $214 million, for an average salary of $23.8 million a year for nine years.

In any negotiation situation, you need to find comparables to support your stance on a particular interest. When a real estate agent sets a price on a home, they look at comparables, other homes that have sold in that area that are similar in size, age and condition. When a house does not sell after a period of time, the price is usually reduced or taken off the market. Fielder, 27, is younger than Pujols, 32. He comes from a baseball background (his dad was also an outstanding slugger). But he does not hit for the average that Pujols has, he did not win a gold glove at first (as Pujols has) and he is not in the same physical shape as Pujols.

According to media reports, Boras heard these same claims from the teams he shopped Fiedler to for weeks. It appears that Boras’ strategy eventually changed. He did not get Pujols money for Fielder, or a 10-year deal, but he got very close.

As in any salary negotiation, you have an initial plan for your interests, salary, contract length and incentives. You test these interests against reality prior to sitting down to negotiate. If the response from your negotiating partner is that they can’t meet your request, the search for common ground begins.

To start a negotiation, you need common interests. Otherwise you have a negative bargaining range. When common ground is established, then you have a place to start the negotiation, a positive bargaining range and an opportunity to build a relationship.

Boras’ challenge was to listen to the market and adjust his goals for his client. It appears he saw the reality of the situation, otherwise Fielder would have ended up watching, instead of playing baseball this year.

For awhile it looked like they might come up far short of their goals, but Fielder and Boras found a way to save face, thanks to the Tigers.

Last year we witnessed many contentious sports negotiations. The NBA and the NFL reached an impasse because of unrealistic goals on both sides. The question is, did Boras or Fielder pay attention to the outcomes of those negotiations: lost playing time, lost salaries and a public view of professional athletes as spoiled and overpaid?

Based on the deal with Detroit, both Boras and Fielder appear to have revisited their goals and made some minor concessions. The feedback they had received from the management at the Rangers, Orioles, Mariners and Cubs appears to have made an impact.

Free agency is an opportunity to grab the brass ring, but Fielder and Boras almost fell off the carousel. The deal with the Tigers demonstrates that you don’t stick with a strategy that does not appear to work, when you have options. Fielder and Boras realized that these high priced long-term deals tend to scare the owners. In recent years, some teams have ended up paying for players who are no longer on the field due to injuries or whose productivity dropped as they got older.

In any business negotiation, the parties in the negotiation start out with a list of interests they need to satisfy. Some are primary, some are secondary. But with all negotiations, they need to develop options, so they are prepared to compromise if needed to achieve one or more of their primary interests. When faced with an impasse, an interest cannot be agreed upon by both sides and then the negotiation can begin to fail.

In order to break the impasse in a salary negotiation, the parties need to develop a creative solution. In the world of business, options such as incentives tend to work. They are: profitability, productivity and earnings per share. Achievement of these incentives is rewarded by bonuses, increased salary and in some cases stock options.

Investing time in planning any negotiation is a critical element of the process. The more time you invest in information gathering and planning, the less time you will need to successfully execute the negotiation. You need to arm yourself with numerous options and credible information to support you goals and interests for the negotiation. You need to research your negotiating partner to learn about his/her approach and how they tend to negotiate. This can be accomplished by speaking with other individuals who they have negotiated with or reading about recent negotiations they have been involved in.

In any negotiation, information, both current and past is the greatest source of power. Unless you construct your negotiation based on pertinent information, potential concessions and options, you will strike out.

Well Mr. Boras, it was the ninth inning, there were two outs, and the count was two strikes, but congratulations, you hit a home run for your client. Detroit now knows who’s on first, but Milwaukee doesn’t. Hey, Abbott.

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Cary Silverstein
He was a senior professor at DeVry's Keller Graduate School in Wisconsin. Cary has published articles in periodicals and on the Internet. He recently published first book with Dr. Larry Waldman, "Overcoming Your NegotiaPhobia". Cary holds MBAs from L I U’s Arthur T. Roth School of Business. Cary has a BA from CUNY, Queens College. He has certificates in Negotiation from Harvard’s PON and in Labor and Employment Law from Marquette University.

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