In the world of sports, much like other industries, contracts can make or break an individual and/or company. Negotiations are often hotly contested, and sometimes emotions get in the way of finding compromise where all parties believe that they have prevailed. Winning a negotiation is not about defeating the other side, but instead it is coming out of it feeling as though something was gained for you or your client. The following 5 tips will set you on the path to effectively negotiating a big contract.
1. Figure out your position and interests.
Money is typically the first thing we think about when it comes to contract negotiations. Sometimes that is the number one concern, but not always. Additionally, in the world of sports, where contracts are often not entirely guaranteed (see: San Francisco 49ers quarterback Colin Kaepernick), the interest of money can be spread across multiple buckets (guaranteed, non-guaranteed and a hybrid type of the two).
It is important to go into any contract negotiation with a clear understanding of what your or your client's interests are in order to develop a more wholistic position. If money is the sole concern, then start high or low depending on which side of the negotiation you find yourself on, but be careful to not provide an unrealistic high or low ball demand or offer, because that could cause the deal to die before it is ever taken seriously as an option.
In sports, other considerations like location, length of term and injury compensation can play a role in negotiations. Make sure to understand your interests and position before negotiations commence.
2. Research the other side.
"Never make the first offer" is a maxim espoused by famed sports agent Donald Dell. While I would agree that is preferable on many occasions, you will not always have the liberty to force the other side to make the first proposal. The leverage of the parties will commonly count heavily toward who presents the first offer or demand. Do not fight this too hard for fear that it may kill a potential deal altogether. Research the other side thoroughly to get a better understanding of the leverage of the parties going into any discussions.
Through research, you may also find information about the other side's negotiation style, tactics and proclivity for getting a deal done. That could even lead you to want to provide the first proposal.
3. Come up with a cooperative or competitive strategy.
I have found that there are two general styles in negotiating: cooperation and competition. Typically, those lawyers in the realm of litigation are far too familiar with adversarial settings and employ (whether they realize it or not) a competitive demeanor. Meanwhile, those who call transactional work their trade are more likely to seek to cooperate toward a mutually beneficial deal. Understand the other side (through research) and use it to your advantage.
More often than not, I believe a cooperative style is best for negotiations. After all, the goal is a finalized deal where both sides feel as though they have won. Figure out your best alternative to a negotiated agreement (BATNA), which is really the point in time where it makes more sense to walk away then strike a deal, and be cordial in trying to get the most for you or your client. You never know if/when you will be negotiating with the other side again in the future. Attack the other side's position, not the person relaying it.
4. Listen and respond, but don't interfere.
People often like to hear themselves speak. They may believe they are "winning" by spouting out more words. Let them do it. Do not interfere. Take notes on the important points that reveal the other side's position and interests, and use the extraneous information against them. This can lead to valuable concessions that gets you or your client to where you want to be in a negotiated agreement.
One of the best things you can do in a negotiation is to demonstrate that you are listening. Recall statements made by the other side and mention them as close to as they were spoken. This will subconsciously impress the other party.
Process comments are also key in negotiations. If you hear the other side go on and on, then when they pause you can make a brief remark like, "Are you done?" If you do it respectfully, it could show the other side that maybe it is time to listen carefully to you. If you find the other side raising their voice, sit back, relax and when they are done, mention that you are here to negotiate a deal, not bicker back and forth. Small victories help.
5. Get it in writing!
You finally have a deal! Maybe you trust the other side. Perhaps you are undoubtedly comfortable that the obligations of the parties will be confirmed through future acts. As a lawyer who has negotiated many contracts and litigated numerous contractual disputes, I will beg you to get the deal in writing.
Even if you start with a term sheet, letter of intent, memorandum of understanding (whatever you want to call the document) get some binding obligations in writing. Even if it never turns into a long-form agreement, having something in writing is more beneficial to a simple oral contract, which may not always be enforceable and often turns into a he said, she said battle of words.