Don't Hate, NEGOTIATE!!!

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