Negotiation Tactics

[theogt]

I'm pretty sure I understand how negotiations work.

Perhaps you do and perhaps in your zeal you're misstating your thoughts. I'll give you the benefit of the doubt in that regard.

 

[theogt]

Fair enough. But we're talking about projections here. Revenues could grow and still fall short of projections. In such circumstances, the owners bear the full cost of the inaccuracy in the forecast. Which would be completely unobjectionable if they also stood to exclusively benefit from any inaccuracy to the upside.

I believe the idea is to set the peg at a point where the parties are comfortable it is below the most conservative of forecasts and the real negotiation point is what % of the "upside" (I use that loosely, since upside is baked in) is going to be split between players and owners.

 

[Verdict]

Perhaps you do and perhaps in your zeal you're misstating your thoughts. I'll give you the benefit of the doubt in that regard.

Thank you. I will be more succinct next time, just for you.

 

[Outlaw Heroes]

In large (multi-billion dollar) deals, it's a standard part of diligence. Nothing outrageous at all. Just business as usual.

Leaving aside that in large (multi-billion dollar) deals, the financials are almost always a matter of public record (though I admit the an acquiror typically gets access to financial information that go beyond the financials, including management forecasts and models), the players aren't acquiring a business here.

 

[Outlaw Heroes]

I believe the idea is to set the peg at a point where the parties are comfortable it is below the most conservative of forecasts and the real negotiation point is what % of the "upside" (I use that loosely, since upside is baked in) is going to be split between players and owners.

I'm sure the owners would be comfortable with using a conservative forecast to peg the guaranteed salary. The players, undoubtedly, will want a more aggressive forecast used since it impacts their base case.

 

[theogt]

Leaving aside that in large (multi-billion dollar) deals, the financials are almost always a matter of public record (though I admit the an acquiror typically gets access to financial information that go beyond the financials, including management forecasts and models), the players aren't acquiring a business here.

Whether private or public, historical and projected financials are made available with ease. Nothing odd about that.

They're negotiating to divvy up a % of revenue of a business. It's not an equity interest, you're right, but it's not far from it. Regardless, it wasn't the players that the owners didn't want to see the books -- it was the other owners.

 

[Verdict]

I'm sure the owners would be comfortable with using a conservative forecast to peg the guaranteed salary. The players, undoubtedly, will want a more aggressive forecast used since it impacts their base case.

You are probably right, but I am also pretty sure that it has very little to do with the point of this thread.

 

[Outlaw Heroes]

Regardless, it wasn't the players that the owners didn't want to see the books -- it was the other owners.

I think that's largely true.

 

[theogt]

I'm sure the owners would be comfortable with using a conservative forecast to peg the guaranteed salary. The players, undoubtedly, will want a more aggressive forecast used since it impacts their base case.

It would be in their interest to push for a deal in which there's a potential for downside, sure, but I don't think that's on the table. Who knows, though.

 

[Outlaw Heroes]

You are probably right, but I am also pretty sure that it has very little to do with the point of this thread.

You've lost me. It has everything to do with the direction that a certain strand of this thread has taken.

1. JIGGYFLY asked you for an example of an outrageous request by the players.

2. I offered, as a potential example, the pegged cap, with guaranteed downside protection, coupled with the true-up, allowing for sharing in the upside.

3. After a bit of back and forth between theo and I, he suggested that the guaranteed downside protection was not a big deal, since they would use conservative projections to peg the cap.

4. I responded with the post you quoted.

I have to assume that you "lost the thread", as it were, since otherwise your post makes no sense (and, to be honest, verges on being obnoxious).

 

[Verdict]

You've lost me. It has everything to do with the direction that a certain strand of this thread has taken.

1. JIGGYFLY asked you for an example of an outrageous request by the players.

2. I offered, as a potential example, the pegged cap, with guaranteed downside protection, coupled with the true-up, allowing for sharing in the upside.

3. After a bit of back and forth between theo and I, he suggested that the guaranteed downside protection was not a big deal, since they would use conservative projections to peg the cap.

4. I responded with the post you quoted.

I have to assume that you "lost the thread", as it were, since otherwise your post makes no sense (and, to be honest, verges on being obnoxious).

I think I will just stand on what I have previously stated. I have tried to convey my thoughts in several different ways. If my intended meaning was lost among the many enlightened posts in this thread, it will just have to remain lost.

 

[Angus]

Stay with it Verdict. I'm a lawyer too, and you know what you're talking about.

For the rest of you, lawyers are trained to be able to represent either side. Their evaluation of tactics is objective.

 

[Hostile]

Stay with it Verdict. I'm a lawyer too, and you know what you're talking about.

For the rest of you, lawyers are trained to be able to represent either side. Their evaluation of tactics is objective.

All of you guys have been marvelous in these threads. I appreciate it so much it's not funny.

 

[SkinsFan28]

Did you think I would need the bold to understand better.

This is totally about your biased statement that the players asked for the moon, for some reason you fail to address that.

There is no rational argument that can be made to support this stance, that is what I responded to and then you brought up unrelated issues to deflect from your initial statement.

Let me make it easy for you what did the players ask for that could be construed as asking for the moon thereby weakening there bargaining position?

If you look at hearts, when you shoot the moon, you get all 26 points, thus getting none, and giving your opponents each 26. HOWEVER, if you fail by even 1 point, you get stuck with 25, while one of the other players takes 1.

I say this, because I think that concept of shooting the moon explains what Verdict had in mind. When I first read his OP, I felt kinda the same as what you have expressed. But Verdict is not saying that the players pushed for wonderful new benefits, merely that their "hand" doesn't have that final winner to get the 26th point, thus they will end up taking a much worse loss. Clearly the players felt that they had the hand to shoot, and going up until this last card, they were doing pretty good, TV Contracts lawsuit is going their way, Judge Nelson said everything they wanted. Right now, the question is whether they will have the courage to eat the queen of spades (go through with a full true forever so be it - decertification) or take their losses, and accept a new, less favorable CBA.

Back on point, to shoot the moon here means make a hard and fast go for it all and don't back down type attitude, and hope you have the cards to win it all.

Let's look at it from the point of if litigation had worked, or the 8th DCoA does support Judge Nelson. Then their shoot the moon strategy will have worked, because the owners will probably be back at the table with an offer very similar to the 2006 CBA, and plus the player may get damages awarded. Thus they would have shot the moon (using the hearts analogy) .

 

[CowboySwagger]

I have been gone for awhile, too long.

I had a vague understanding on whats going on with the NFL.

But honestly, after reading this thread, even with the misunderstandings, and clearifications, light sarcasm, passionate opinions, and professional attitudes.

I am a much better person for reading and obsorbing many different opinions and view points.

Thank you, to members for your articulate, expressive, and simple explanations and CowboyZone for your wonderful, colorful, and intellegent members.

I am not even worried if football does not happen because this forum will still educate, and thouroughly entertain me, and for that, many Thank You's to all that display there passion and intellegence.

 

[mmillman]

"There’s not a single, solitary owner suffering during this lockout. The lockout, remember, is being conducted because the owners want a larger profit margin. That’s a fancy way of saying they’re not making enough money.
Trust me, they aren’t flying commercial. And they aren’t staying at Best Western hotels throughout the country.
But throughout the league, owners are docking their employees 10-25 percent of their salaries. The Lions just announced two-week furloughs. The Raiders want their employees to help sell tickets for a season no one knows will begin to stave off salary cuts.
Whatever.
Every NFL owner is a multimillionaire. Many have several hundred million. None are hurting financially.
Those making their employees pay the price for their desire to make more money should be criminal."

 

[peplaw06]

I believe both sides started too high and got insulted by the other side's proposal. Egos kicked in and "the hostage is dying."

Careful... I got accused of being too imaginative by saying certain people got insulted.

I would just like to add that I am shocked that people are coming in this thread and flaming a guy that does negotiations/mediation for a living as an attorney.

Absolutely floored.

seriously? Its been happening for months.

 

[DallasEast]

Every NFL owner is a multimillionaire. Many have several hundred million. None are hurting financially.

Those making their employees pay the price for their desire to make more money should be criminal."

True, but that point of contention is not isolated to American professional football alone. If that stance should be validated (and I'm not stating that it should not be), there are millions more employers in this country who should be equally prosecuted. Questionable greed is not solely limited to an arena inhabited by billionaires.

 

[CCBoy]

Undoubtedly true. The players are at the disadvantage. But that has nothing to do with how they've negotiated. That disadvantage is a fact that has existed for years, ever since the league began expressly planning -- that is saving -- for a lockout. It is a fact that existed before the negotiations began. The course that the players chose, litigation, was -- and is -- the only avenue that had even a chance of altering the fundamental dynamic of an uneven playing field in terms of the negotiations. If that option fails, or was not pursued, the only real option the players will have is to accept the owners terms as presented. That's not a negotiation. Its a surrender. Which is why I take your criticism of the players as frankly a little silly. The course they've taken is the only one with even a remote chance of success.

And its a course that will be, in the end, costless. Even if the litigation fails, the owners won't lower their offer. As time goes on, the players will become increasingly disenchanted with their leadership, which will ultimately turn to anger, which will likely lead to surrender. The last thing the NFL wants to do is to turn the player's anger from their own leadership to the other side, which I suspect lowering the offer has a real potential to do. If the players get adequately ticked off at the league, we could actually see a loss of football for an extended period of time and ultimately everybody would get creamed. No, the owners won't lower their offer. The last thing you want to do when dealing with the guy who just killed a hostage is provoke him to a point where he's willing to kill ALL the hostages. Which leads me to the view that, when all is said and done, the players will do no worse than what the league was offering in March. Which makes their litigation gamble, even if unsuccessful, a smart roll of the dice.

Thank you DCDave, as it truely is a 'golden nugget' as to motive on the player's side. Like Hos, I hate the emotional attachments that I carry in my desire for resolution to arrive at our door, (a fan's). But your effort here has expanded understanding for either side of the issue camp, for knowing why the journey was taken.

It provides the motivation to pull the curtain back, when the 'great Oz' bellows to the travelers seeking their own gain in their trip. The why of how Smith was selected, is not revealed for all watching the unfolding of the Player's, and hence, Owner's posture through the rounds of negotiations and litigations. It is sound reasoning that a Trial Counsel to have been selected spearhead such an aggressive approach to maximize their own positions in what appears to be an approaching something of a 'trail of tears.'

As a fan, I now additionally, don't want the owners to proceed on a 'scorched earth' journey as well.

The simpleton side of this fan, would tend to side with a postured stance through preliminary stages, but discussions such as the participants on this provide, is more than a simple understanding of the complexity of issues being battered about, but indicative of the strengths of very Country and it's concepts.

On a Memorial Day weekend, I salute yours and other's participation, as it waters the very roots that our Service Members fight so valiantly to protect.
That is a system that peacefully allows the full watering of beliefs for both sides of an issue.

Althou this may serve to be an emotional provocation for many, and numerous juncture in discussion and road traveled by actual participants, but we have all been enriched by it. As your insights provide...

So, when do we get some practice and the NFL back on the road?

But here, a sincere Thank You, Sir!:starspin

 

[CCBoy]

True, but that point of contention is not isolated to American professional football alone. If that stance should be validated (and I'm not stating that it should not be), there are millions more employers in this country who should be equally prosecuted. Questionable greed is not solely limited to an arena inhabited by billionaires.

Sounds like something is going Postal here...(in concept, and I'm employed by the Postal Service).