Saturday, January 22, 2005

Short Follow-Up: Rocket-ing Through a Negotiation  

In the last entry, I discussed Roger Clemens' arbitration and how, because he was in the catbird seat, he & his agents could file an apparently over-the-top figure for their side.

This story from yesterday indicated that at the end of the process, Clemens would have:

  • a $22 million contract, or
  • a $13.5 million contract, or
  • he can retire.

The sides didn't get to the end of the arbitration process. They negotiated a contract with a figure in between the two filed numbers, according to this story.

The negotiation points worth noting are these.

  1. The roughly $18 million, 1-year contract made Clemens the highest-paid pitcher in the game, something he's been before. This had emotional "currency" for the Rocket.

  2. The Astros came in roughly $4 million below what they would have had to pay him if the arbitrator had taken Clemens' number instead of theirs. How likely was that? I don't know, nor did they, but it's somewhere between 10% and 99%, and so when they calculated the probabilities, they took this hedge approach. Most of you don't go through arbitration processes, but it's still worth noting for your own negotiations that when both sides have a stake in the ground that seems unyielding, further exploration is possible and can be fruitful.

  3. The apparent end of the process (end in the "final step" sense and end in the "end goal" sense) isn't always the end in reality. Both sides viewed the arbitration as part of the choreographed spectacle. If both sides are reasonably healthy (and while I have my doubts about Clemens, I think his agents know what they're doing) then postures, "final offers" and ploys are all part of the choreographed steps but ones that lead to further opportunities to finding the goals for one side or both.

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