I say, if you don't like what you have or what you're getting out of the deal, then learn how to negotiate for something better. I had the
honor and privilege of conducting an interview with up and coming sports agent
Lorenzo Parker from Detroit Michigan. He is the owner of a company called Pro-Actus Sports & Entertainment, Marketing and Management where he represents a host of athletes, coaches, and entertainers. I
was able to get some great insight into his world as he shared with me some of
the technics he uses when going into a negotiation. Negotiations are an
intricate part of his job description. I asked him some questions and he gave
me some really detailed answers.
The first
question I asked Mr. Parker was how he handles positional bargaining tactics. He stated that positional bargaining
can present many challenges in negotiations between sports agents and teams
(i.e. General Managers, Scouts, and Player Personnel). When representing amateur
athletes, especially those who come from Division II schools and lower, it is
difficult to market their qualifications to compete at the professional level.
Statistics show that less than 1% of student-athletes are scouted and recruited
by professional sports organizations. This fact alone makes the task of
securing professional employment even more difficult. Additionally, the
experience of the agent and the agent’s company may present challenges. For
example, a relatively new sports agent or agency may not have the rapport with
teams needed to effectively pitch its clients for employment. Teams unfamiliar
with boutique agencies tend to shy away from negotiations altogether. However,
there are instances where the right client, sales pitch, and timing can help
secure opportunities for clients who have very little popularity in the market.
Assuming
that the agent and client reach the negotiation table of a professional team,
the next hurdle is trying to overcome the Team’s positional bargaining tactics.
For example, if your client is relatively unknown, a Team will use that fact in
its favor. The reasoning is that your client has not demonstrated the level of
skill and ability to justify compensation beyond the sport’s minimum. Virtually
every professional team uses this positional bargaining tactic (or lack
thereof) to try and get the best talent available for the cheapest price.
Often, they will tell you (the agent) that an increase in compensation may be available
after your client has made it through training camp, survived the “cutting”
process, and demonstrated that they can compete far and above the talent that
they already have or are considering. The cutting process is a period where
players attend training camps and are tested in various competition tasks. If
they are unsuccessful during this period, they are ultimately released.
Unfortunately,
there is very little room for negotiations under these circumstances. For
example, a player who performs at a developmental league level (semi-pro) is
bound by the standard compensations at that level. The reason for this is that
developmental teams are extremely limited in funding and the compensation is
calculated based on how much the Owner’s can afford to pay. Conversely, when a
client is considered a top prospect in a sport and is one who is projected to
go high on the Draft board (i.e. NBA or NFL), positional bargaining tends to
swing in the agent and client’s favor. This is because the larger professional
leagues and their respective teams are interested in bargaining for the best talent.
The owners in those leagues tend to have deep pockets to pay for players that
are in high demand. Wow was all I could say. Mr. Parker gave a great response
and detailed information about positional bargaining.
The next
question I asked Mr. Parker was how he separates the person from the problem
and if he had any tips for new
negotiators who are trying to do this? He suggested that the best way to
separate people from the problem is to look at what each party wants to
achieve. Typically, problems arise due to a lack of communication and
understanding, which is completely normal. Staying with the sports analogy, if
a client wants to negotiate a higher salary and the team refuses to do so because
a lack of confidence in your client’s abilities, then the main problem is not
so much the client themselves, but rather the production. The agent in this
salary negotiation must continue to reiterate the potential of the client and
explain to the team that if a new contract can be negotiated, then compensation
should be contingent upon the client achieving certain benchmarks. Together,
the agent, the client, and the team (typically the GM) work together to set
realistic benchmarks. As a result, the client is happy because they remain on
the team and the team is happy because they can retain the client with a view
toward improved performance. This allows the client to feel incentivized
through their continued efforts. The team is satisfied because they are not
forced into having to pay an increase upfront and can continue to receive the
athletic services that the client can provide.
For
example, the Client (Wide Receiver) currently makes $45,000 for a standard CFL
Contract with an option to renew. The Contract’s initial term has ended. Client
has played one year for the CFL team and wants an increase in salary. The CFL
team has several options to consider, either 1) renew for the option year; 2)
release the player; or 3) increase the salary according to certain production
benchmarks negotiated by both parties (i.e. All Star = $5,000 bonus; Lead
league in reception yards = $3,000 bonus; Win Championship = $4,000 bonus).
According to the third option, the Client now has the potential of making
$57,000 for the second contract. This is a $12,000 increase in salary potential.
As a result, if all parties agree on the third option, the problem itself is
resolved and the people in the negotiation are happy.
I asked
Mr. Parker if he ever used dirty tricks
and he responded, “No, absolutely not.” He stated that it is important to have
integrity when dealing with clients. It is also important to maintain integrity
when representing a client in the negotiation process. An agent, or
representative, has a fiduciary duty to act within the best interests of their
client. When a representative resorts to “dirty tricks” on either end of the
spectrum you risk losing the client you serve as well as damaging your
reputation, which in the end could detrimentally affect your future in
business.
Lastly, I
asked Mr. Parker if he felt like he was a good negotiator and he said he
considers himself a good negotiator, however, there is always room for
improvement. He stated that he thinks “good” is best determined by those who
have engaged in negotiations with you or those who you have negotiated for. As
an agent your job is to help others see the value your client brings to the
deal. It is critical to cast your client in the best light possible. Of course,
every client is different and at the end of the day these are real people whose
successes and failures may depend on your ability to generate business. The
agency business hinges upon relationships. Long-term relationships and a solid
reputation for doing honest, professional business can open many doors for both
you, as the representative, and the clients you serve. My approach to
negotiations is to try and generate a result that both parties of the deal are
pleased with. This approach is what I would consider a “win-win” negotiation or
“mutual benefit.” The best way to achieve this result is to have a solid grasp
of each parties perspectives, understand what motivates them (their interests),
and try and tailor the negotiations in a way that each party can appreciate.
I had a
really great time interviewing Mr. Parker and I learned a lot. I hope you learned
much from reading this as well. Please be on the look out for Mr. Parker. He is
definitely doing some big things in the industry and making some major moves.
-The Mike
Sears
