Monday, March 29, 2010
When Minnesota Twins catcher Joe Mauer signed an $184 MM, eight-year contract extension Monday, many informed fans hanging around their samovars sipping chai were reminded of Alex Rodriguez' historic $252 MM, ten-year signing that agent Scott Boras swung with the Texas Rangers in 2001, and many assumed this second-most-lucrative player contract in baseball history must have been another Scott Boras deal.
It wasn't, and as Murray Chass pointed out in a recent column, the deal, the negotiation and the results beyond the lots-of-money-for-lots-of-All-Star-years infrastructure are all so different because Mauer's agent, Ron Shapiro, is "the Anti-Boras". There are some good Management by Baseball lessons here for managers, but to get to them we first have to establish what Scott Boras is first.
Scott Boras is a fabulous lightning rod for people's sublimated angst about the shrinking "fairness" in North American economic structures. But he's a great example of an effective, hard-working honest practitioner of relentless, leave-no-money-on-the-table negotiating. If you're at all interested in negotiating technique, he's a great model to study and clone at least a few techniques from. Few people who do negotiating but not full-time for a living the way Boras does can afford to be a relentless and studious and systemic as he is, but that doesn't mean you should overlook his process. I've written about it before, most applicably in this 2004 entry and this follow-up. If you only know about the deals that result from his techniques and not the actual work Boras does to make those work out the way they do, I recommend you read those before you try to understand the Anti-Boras.
Chass believes Mauer's agent, Ron Shapiro, is the Anti-Boras.
Mauer signed an eight-year, $184 million contract with the Twins the other day, eschewing the opportunity to become a free agent at the end of the season and leave Minnesota for far greener pastures, in New York or Boston, for example.
If Mauer were a Boras client, he would not have signed that contract. But then, he wouldn’t have chosen Boras as his agent.
Agents have track records, and players gravitate to the agent whose negotiating style suits their needs and desires. If they want to get every last dollar, don’t mind putting up with possible controversy and aggravation, don’t care how long it takes and don’t care where they play, hire Boras. If they care about where they and their family will be happiest and most comfortable and will settle for less than the absolute last dollar, go with Shapiro.
And here's the first Management by Baseball lesson...
LESSON #1: WHEN YOU HIRE SOMEONE TO REPRESENT YOU, MAKE
THEY SHARE YOUR GOALS ENOUGH TO MAKE YOUR GOALS HAPPEN
The agent / attorney / negotiator / real estate consultant, or whoever you have acting on your behalf better be able to come to an end point that serves your needs. That, of course, requires that you know what your real goals are. I'm not sure what goals the $252 Million Eddie Haskell had, so we can't know if he got them, but it's not a big reach to suss out that A-Rod wanted money and fame that would validate him and act as additional confirmation of his extraordinary baseball talent.
As Chass wrote, starting here with a quote from one of the baseball's brightest management minds, Cleveland Indians' executive Mark Shapiro (incidentally, agent Ron Shapiro's son):
“His distinguishing factor,” Mark said, “is he considers himself an advocate of the player first. He seeks to do the best job for the player in the context of satisfying what he wants. In today’s game that’s not always the case. Some agents put client recruitment ahead of what the player really wants. They seek the best deal regardless of what the best fit is.
“Every single deal they do is a platform for the next client. How will this be viewed in the industry?”
There are other capable agents, but at the moment Shapiro and Boras stand out as the polar opposites of the business.
Boras will rarely sign a player to a contract extension in the months before he can be a free agent. Free agency, he believes, creates the ultimate value of a player’s worth.
It's not that the agent has to share your goals.
When I negotiated my book deal with HarperCollins, the Author's Guild did me one of the seventy great they have done for me...they advised me on someone to act on my behalf (I didn't have a literary agent, normally the person who would do this) and connected me with a stellar, cool and über-capable attorney, Alan Kaufman. In talking with him before signing him on to represent me, I discovered that he could Shock 'n Awe the team on the other side of the table, and turn them into 300 pounds of steak tartare...he was much more experienced and was used to bagging big business game. That wasn't the kind of deal I wanted to come away with...I was willing to leave some immediate money on the table to ease a longer term collaboration with them I had in mind. Alan worked to my overall goal, but of course got me a great deal with his advocacy with his arsenal of knowledge and unsurpassed skill.
He didn't exactly share my goals, but he shared them enough to make a win-win deal happen.
Back to Chass. Boras has a goal that few of his clients have, which is to use every deal to advance the value of every other deal that can/will come up in the future. It's not that his up-the-market strategy works against the client's dollar interest -- it's the opposite...it actually benefits him more. But if the maximum money-confirmation-of-one's-worth is a lesser goal, Boras' representation is going to focus on doing a good job with an objective that isn't the primary one.
Not bad, not good, just different.
Back to Chass:
Now there is Mauer, whose annual average is $23 million, second highest to Rodriguez but highest for a player who was not a free agent. Immediately after his signing, ESPN.com quoted agents as saying they thought he could have attained a $250 million contract had he waited and become a free agent later this year.
Shapiro thinks it’s possible that Mauer could have exceeded that figure, speculating that had the Yankees and the Red Sox become involved, $30 million a year for 10 years might have been possible. But all speculation is irrelevant because Mauer wanted to remain in Minnesota.
“Joe had information from me about potential contracts,” Shapiro said, “and it was pretty clear to me he might be tempted to test the water. But in his heart he had a desire to play it out in the way [Shapiro client Ripken] Cal did in Baltimore and [Shapiro client Puckett] Kirby in Minnesota.” [both chose to stay with their teams for their entire careers]
How then does an agent proceed to achieve that goal while making sure his client is not shortchanged? Doesn’t it make the agent’s job more difficult?
“It makes it more difficult only in one sense,” Shapiro said. “It takes much more of an effort to negotiate with the club in this circumstance. It’s not a regular marketplace. I support the theory there is always an irrational bidder. There’s always someone who will step in and create a new marketplace without any effort on our part.”
It’s that bidder whom Boras relies on to create or drive up the market for his client. Hicks played the role classically with Rodriguez in 2000. Before initiating discussions with the team of the player who wants to stay, Shapiro said, “you determine if a player is willing to go elsewhere if the club isn’t willing to give him proper value.”
LESSON #2: GREAT NEGOTIATING TAKES TONS OF PREP,
REGARDLESS OF THE APPROACH
In fact, I'll say one great giveaway of less-than-great negotiation is: it was easy. You might get to a decent outcome, but that doesn't mean it'll be reproducible and it doesn't mean it was fine negotiation.
When the player wants to play for a single team, the rep may find the arguments trimmed, and that's especially true if the single team is the team the player is already playing for (because if it's not, the rep can argue with a straight face the current team is a competitor...that works in representing any player who's not Art "The Great" Shires, Waxahachie's second most unusual Baseball legend of all time). Where Boras puts the bulk of work in connecting reasons and arguments between deals and in bulky notebooks filled with intelligent evidence that argues for the player's value, Shapiro's time is more in matching motivations, assessing non-cash values to balance equations.
“The club,” Shapiro added, “knows or suspects he wants to be there, but he has already decided if it’s not a fair deal it won’t be a deal.”
Beyond establishing ground rules with the player, Shapiro said, “you prepare like you do for anything. You get the client ready to withdraw from the process so his emotions aren’t going up and down if things aren’t going well. You work with the client to understand a fair deal is a deal that satisfies him but is not a high end irrational market deal.”
There's more interesting pith in the Chass piece; I urge you to read it to get the most from it. But before I move on, there's one more point worth reinforcing, in Baseball and beyond...
LESSON #3: IT'S EASIER TO NEGOTIATE FROM SOMETHING
TO YOUR OWN SETTING THAN A VASTLY DIFFERENT ONE
Chass concludes with the word that Shapiro views the Mauer deal as the final panel of a triptych, the last win in a trifecta. Having made lucrative deals with Kirby Puckett and Cal Ripken,Jr that enabled both to cash in big time while also giving them the continuity of staying with the teams that had "raised" them, he was reinforcing a familial bond that he seems to value. The only two agents I've met and talked with personally, Myles Harlow Kahn and Paul Kinzer, both had this predisposition strongly. Kahn got out of the business when he came to accept that the fierce familial loyalty he was bringing his to his clients' personal and business affairs wasn't returned in kind; that is, too many appreciated his representation, but thought they could get more money from a bigger agency.
All of us who negotiate as a big part of our living regularly take stances we don't love or use tactics or tools we rarely would in our personal lives. But we are most effective in the long term when we are making a point that we find arguably true or when we drive the deal to a place we view as a "win" in our own value system.
LESSON #4: WHY THE ANTI-BORAS HELPS BORAS SUCCEED &
In the title for this essay, I suggested Shapiro boosts Boras in the latter's negotiation with teams. That's true, and equally true is that Boras boosts Shapiro's, equally.
The fact they they are so different makes it harder for a single team to master the counters, to build a set of tactics that universally work in negotiation. If you sit across the table from Shapiro and act on the assumption it's Boras, you'll lose or the deal won't go through, but you won't win. If you sit across the table from Boras and act on the assumption it's Shapiro, you'll end up with a one-sided deal not in your favor or or the deal won't go through, but you won't win.
Having diversity of approach helps players (better overall negotiation advantages) and agents (better success in overcoming teams' tactics). What works in Baseball, the most fierce zero-sum crucible of competition, almost always works Beyond Baseball.In your own organization, do you have a diversity of negotiation approaches?
Are they reasonably in tune with your outfit's values?
Are you winning most of the time, and if not, are you learning new techniques?
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