What MLB players and owners are really negotiating about

Earlier this week, MLB owners presented their opening offer for a 2020 baseball season to their counterparts in the players’ union.

Their proposed plan to start the season in July includes half the amount of games, a redesigned divisional schedule to make it easier on players and staff, as well as a number of other logistical adjustments.

However, the central offer from ownership is a 50-50 revenue split with players, which the owners believe is reasonable based on the fact that the ticket and stadium-driven revenue from which they rely will be little to non-existent whether a season happens or not. Seems reasonable enough, right?

In his highly detailed account of the opening round of negotiations, ESPN’s Jeff Passan explains that unfortunately, the 50-50 split is likely to be a complete “non-starter” with the players’ union for a variety of challenging reasons.

First, the players feel that agreeing to split revenues in this way would resemble a salary cap, something they have strenuously avoided in the past. Second, and potentially harmful, is that the players believe both parties have already agreed to a simple pro-rated version of their salaries when they last negotiated in March. (Conversely, the owners believe the agreement was much more flexible and designed for further consideration. According to Passan, outside lawyers themselves disagree due to ambiguous wording.)

One thing that both sides appear to agree on is that if a season is to occur this year then negotiations must be completed by the beginning of June, at the latest, so that a condensed spring training can enable teams to work towards getting their players ready for July.

So as the sports-world’s greatest hope begins a two-week game of chicken, with billions of dollars to lose and the hearts of millions of fans on the line, both parties will have to address an important and challenging question – one that is being negotiated not only in professional sports but in every private industry and level of government due to the pandemic: What is fairness?

If we decide to avoid the philosophical rabbit-hole and stick to negotiation theory, we can find some solid ground. According to social psychologists, there are three types of fairness principles from which negotiators will attempt to claim value. They are: equality, equity, and need.

Equality means that parties should share any rewards, profits, or sacrifices equally, an argument the owners are looking to leverage by anchoring their opening offer with a 50-50 split.

Equity means that rewards or profits should be allocated based on who is contributing the most to the pie. For example, players are looking to frame the negotiation based on the fact that the game cannot be played without them, they are ones putting themselves at risk by gathering, and the ones who will have to live with various inconveniences such as restricted travel to see families.

Need states that the pie should be divided according to whoever most requires such resources or profits. And while this argument might not carry much weight in business normally, the pandemic has blurred many distinctions. For example, some have already pointed out that the billionaire team owners will be incredibly wealthy with or without a season, whereas the majority of the players and staff might depend on this year’s income to support their lifestyles.

Conclusion:

It will be fascinating to see how these differing versions of fairness evolve, how the parties will leverage them to frame their arguments, and most importantly, if some mixture of agreement can be found in time to save a sports season.

As a lifelong fan, I’m selfishly hoping that both parties can find their fairness balance.

For I, like Kevin James, miss baseball very much.

How to resolve a difficult negotiation or harmful conflict

In my last post, I described two of our social tendencies that have the ability to create and escalate harmful conflict. 

Below are four powerful strategies we can use when conflict escalates to the point of peril and instead change course towards a mutually beneficial outcome.

  1. Offer a reasonable concession

As counter-intuitive as it may seem to many negotiators, there are few things more effective than providing a concession when trying to break out of spiraling conflict or difficult stalemate. A great example of this can be found in the detailed account of the negotiations between The United States and Iran during the Obama presidency titled “Losing an Enemy” by Trita Parisi. In his book, Parisi demonstrates how the parties broke through the consistency trap of their previous red-line demands, as well a dangerously accelerating game of Chicken:

What resolved the nuclear issue was ultimately not the pressure the two sides could bring to bear on each other, but the discarding of unreasonable and unrealistic demands – whether the American insistence on zero enrichment or the Iranian belief that it could present Washington with a nuclear fait accompli.

In this case, it was the U.S. who blinked first, deciding to play their best card up front versus holding it until the very last. This unexpected concession surprised the Iranians. They swiftly decided to reciprocate by agreeing to negotiate with the U.S. directly, itself considered an important concession. After a successful deal was finally completed in 2015 it was this chain of events that was credited for jump-starting what was widely believed to be a lost cause.

  1. Keep the communication lines open

If we are not ready to make a significant concession at the very least expressing our openness to communicate is a must. For while it is true that “active listening is the cheapest concession we can make”, it is also true that we cannot actively listen if the other party won’t talk. Similarly, we cannot expect the other party to empathize with our situation if we choose to disengage.

So how can a proactive negotiator resurrect a broken dialogue? Two methods stand out. First, we can attempt what former FBI hostage negotiator Gary Noesner calls one way dialogue. As he explains in his book “Stalling For Time”, one way dialogue involves addressing potential unstated questions, concerns, and fears of the other party. (President Obama attempted a variation of this on a geopolitical scale when he released a video message to all of Iran soon after his 2009 election.) Second, we can attempt to set up a private dialogue outside of the formal setting, which the U.S. and Iran did by negotiating with each other in the country of Oman secretly in 2013. Also known as “going backstage”, this avenue can allow participants to explore the idea of being flexible without having to commit too early or posture for their internal audiences.

  1. Bring in a trusted 3rd party

If communication lines exist and reasonable concessions have yet to get the ball rolling there’s either too much animosity to focus on problem solving or not enough trust to believe that positive gestures will be reciprocated. It is at this point that a respected third party can be used to formally or informally mediate the conflict. For example, Parisi describes that when the U.S. and Iran finally decided they were ready to talk seriously their secret meeting was arranged and mediated by the Sultan of Oman, one of the few leaders in the Middle East who had a good relationship with both parties. Further, at crucial points when their negotiations were on the precipice, both parties relied on the Sultan to give verbal and written assurances that words could be trusted. It is often this very ability of a third party to provide a helpful private forum, along with additional positive assurances, that creates the momentum and oxygen needed to move forward.

  1. Create an intelligent compromise

Finally, whether one or a combination of the above strategies are employed, our most competitive and challenging negotiations will usually require significant creativity.

According to social psychologists, there are five effective ways we can generate integrative solutions leading to a mutually beneficial outcome. The first is known as “expanding the pie”, which involves creating additional value through the combination of the parties’ goals and interests. The second is called “nonspecific compensation”. This involves finding alternative ways to compensate each other for concessions that cannot be matched in the same form provided. The third is “cost cutting”. Cost cutting involves reducing the amount that a party will have to sacrifice in terms of actual dollars or perceived risk. The fourth is called “logrolling”, which involves taking the specific demands of each party and evaluating what trades can be made based on how differently they are valued. (A common example is one party agreeing to pay a higher price if the other will provide more generous terms.) Finally, the fifth is called “bridging”, where the underlying interests of each party are satisfyingly addressed via an outcome that is different from their original demands. Interestingly, most if not all of these creative forms of problem solving can be found in Parisi’s account of the negotiations between the U.S. and Iran.

CONCLUSION:

“The Negotiator who suffers from myopia will fix on his or her objective and assume that there is only one alternative for getting there. The more skilled negotiator will be able to discern the connection, complex though it may be, between some new alternative and the objective which they seek.” Walton & McKersie

The beauty of each of the four strategies above is they all have the potential to provide a face-saving off ramp when on a dangerous path of escalation or stalemate. However, one party will usually have to take the lead in getting things started, implementing one or more of the various strategies in a trial and error format that will test our grit and determination. Fortunately, where there is a persistent and creative will, there often is a way.