Power Play for Howard

Organizational Negotiations – MGT/445

Power Play for Howard

  1. Introduction
  2. Negotiation Plan
    1. What are the issues in the upcoming negotiation?
      1. The Washington Bullets future dreams of championship glory rely on signing Juwan Howard.  They may give the opening bid as the current team for Howard.  They have some leverage, as the team and state hold a special place in Howard’s heart.
      1. The Miami Heat also wants Juwan Howard to compliment Alonzo Mourning, creating a dominant combination of players.  The Miami Heat cannot go over their spending cap, and must reserve monies for Alonso Mourning.  They already have a major star player as well, so it may be possible they will not put out as much money for Howard as Washington is willing to pay.
      1. Juwan Howard wants to remain playing and living in Washington, but also feels he is worth 100 million dollars to whichever team will pay it.  He hopes Washington will remain loyal to him by paying him what he feels he is worth, claiming he has given 100% on and off the court.
    1. Based on a review of all the issues, what is the bargaining matrix?  Which issues do we have to cover, which issues are connected to other issues?
      1. The bargaining Matrix include 3 parties; Juwan Howard, The Washington Bullets, and The Miami Heat.  In some issues it is a WIN/LOSE matrix, but for other issues it is a WIN/WIN.  Juwan Howard and one team can both win, if they win the signing process, making the other team the loser.  The paramount issue is 100 million dollars, which is only connected to the other issue of Howard remaining in his home state and team, if the monetary offer of both teams was the same.  Then the issue of home state and team would be the deal winner for the Washington Bullets.

                                                                            Bullets              Heat           Howard

                            Bullets Offer 100M+                    WIN              LOSE          WIN

                            Bullets offer same as Heat           WIN               LOSE          WIN

                            Heat Offers 100M+ First               LOSE            WIN           WIN

  • What are my interests?
    • Obtain the greatest amount of money and incentives for Juwan Howard, preferably from the Washington Bullets, so my agent’s percentage will be as large as possible. 
    • What are my limits-what is my walkaway? What is my alternative?
      • $100 million over seven years is the target goal.
      • Limits will be determined on offered bids.
      • Alternatives include smaller monetary amounts linked to shorter contracts. Larger bonuses and incentives may allow for flexibility. Greater endorsement benefits for the client may allow room for negotiation.
      • It is difficult to determine a walk-away point. Howard must eventually accept an offer or lose his source of income. Ultimately, after weighing the pros and cons and exhausting all options, the only alternative would be to accept the best offer.
    • Defining targets and openings-where will I start, what is my goal?
      • David Faulk’s primary target is $100 over seven years. He should start by listening and allowing other teams to make offers. He should state his client’s interests. For example; while his client prefers to stay with Washington, he also deserves to be compensated for his skill.
      • If the target amount is not offered, establish that Howard will not accept an offer of less than $100 million.
      • Other topics of discussion include contract renewals, trade options, endorsement benefits, sign-on bonuses, and injuries.
    • Who are my constituents and what do they want me to do?
      • There are many stakeholders affected by David Faulk’s negotiation strategy.
      • Juwan Howard himself expects Faulk to achieve the intended monetary goal of $100 million over seven years.
      • The agency that Faulk works for expects positive results to maintain a solid reputation and gain future clients.
      • Current and potential sponsors associate their product name with Howard’s success.
      • Juwan Howard’s fan-base should also be considered in negotiations. Whether Howard stays in Washington or moves elsewhere, fan reaction, at least initially, can have a positive or negative effect on negotiations.
      • Ultimately, all of Faulk’s constituents want him to reach the intended goal and make them all a profit. 
    • Who are the opposing negotiators and what do they want?
      • Wes Unseld, General Manager of the Washington Bullets wanted to resign Juwan Howard under a seven year, $78.4 million contact.
      • Pat Riley, coach and President of the Miami Heat wanted to acquire Juwan Howard to play alongside Alonzo Morning. Riley’s only budget was the NBA salary cap. 
    • What overall strategy do I want to select?
      • The competitive, win-lose strategy ensures the most is gained for agent and client.
      • Controlling information during negotiations maximize own outcome.
      • Using threats and bluffs helps maintain the upper hand.

I.  What protocol needs to be followed in conducting this negotiation?

  1. The NBA has specific guidelines through the collective bargaining agreement (CBA), but additional protocol must be addressed.
    1. As the agent, Falk had to set the negotiation agenda for each meeting, decide where the meetings would take place, how long each session should last, and select alternatives should the negotiations fail.
    1. The NBA allowed free agent negotiations to begin on July 11, at 4:59 p.m. so Falk set the negotiations to begin at 5:00 p.m. In preparation, all teams interested in Juwan Howard were advised to prepare offers.
    1. In the first round of negotiation, all discussions transpired in the agency offices. As Howard’s existing team, the Washington Bullets had the first opportunity to negotiate from 5:00 p.m. – 8:00 p.m. Between 8:00pm and 11:00pm, two additional teams submitted their interest, and beginning at 2:00 a.m., Pat Riley began negotiation.
    1. Falk’s agenda remained the same; negotiate a seven-year contact for Juwan Howard for over $100 million.
  2. Conclusion

References

Lewicki, R. J., Saunders, D. M., & Barry, B. (2006). Negotiation (5th ed.). Boston: McGraw Hill