Professional sport is a lucrative industry, with athletes signing contracts worth billions of dollars each year. Teams and brands often prefer to offer athletes incentive-rich deals rather than a large, guaranteed salary. So, players have many clauses they need to tackle to ensure they sign the best contract possible.
Are you looking to learn some pro strategies for negotiating employment and endorsement contracts for athletes? If yes, consider these six strategies from procurement negotiation training utilized by top sports agents.
Do Your Research
Examining the market forces within your sport can guide you in procuring the best deal. Major sports leagues like the NBA, NFL, and NHL have collective bargaining agreements (CBAs). A CBA is a written legal contract between the sports franchise and the union representing players. CBAs may rely on a system that caps salaries to league revenues.
So, players and agents need to consider a league’s financial position to gauge salary expectations. Similarly, negotiators for brand procurement deals need to consider broader economic forces. For example, in the middle of a global shutdown in 2020, it might have been unrealistic for athletes to expect a significant increase in the price of their brand deals.
When researching your sports industry or franchise, train yourself to consider these questions:
- Who else in your desired team plays a similar position on the playing field?
- How much are the other players earning?
- What are the other teams paying their athletes?
- How many other players is the team talking to?
- Can you gauge the other side’s negotiation style based on their past negotiations?
- What are the team’s priorities in the coming seasons?
Keep Public Relations in Mind
Remember that what you do off the playing field also affects your income, maybe even more than your playing prowess. Negative press and poor public relations (PR) have the potential to kill your sporting and earning dreams, so tread carefully.
Lance Armstrong and Tiger Woods are probably the best-known sports figures with firsthand experience in how scandals can soil deals. In 2012, in a single day Lance lost at least 11 endorsement deals after doping details emerged. Between Nov 2009 and Feb 2010, Tiger lost at least four major deals after marital infidelity revelations.
Protect your integrity to guard the value you would bring to your team and brand. As well as protecting their image, an athlete can also use PR to increase their marketability. Charisma and an ability to think on your feet can help you procure more lucrative deals. Effective PR can take time, so enrolling on in PR training or hiring a PR manager may be advisable.
For instance, Olympic judo medalist Ronda Rousey uses PR to great effect. Appearances on TV talk shows demonstrate her appeal across many entertainment platforms. Her PR efforts often attract deals as an MMA fighter, WWE wrestler, actress, author, model, and video game producer.
Negotiate Beyond Money
For many athletes, money is a crucial consideration in contract negotiation. There are strict salary caps with little wiggle room in major sports leagues like the NFL and NBA. Yet, making the best use of that small wiggle room can make a significant difference in your career.
For instance, can you discuss transfer restrictions? Depending on how you’ve mapped out your sports career, you might want fewer or more restrictions on transfers. Some more examples of clauses to scrutinize include:
- Guaranteed salaries
- Length of contract
- Injury compensation
- Retirement plans
- Medical cover
Embrace the Pause
No matter how well negotiations are going, at some point you may encounter a stalemate. Maybe you’ve agreed on salary but you disagree on bonuses. Perhaps everything else under discussion looks great except the team’s offer for injury compensation. Whatever the stalemate, negotiation training advisors say a pause in discussions can be a positive event.
Breaks enable both sides to regain their composure. A breath of fresh air can provide perspective. The break may allow you to back out of an emotional and intensive discussion. Use the pause to reconsider your priorities and find new angles for value exchange.
Line Up Alternatives
Ideally, an athlete should seek more than one firm offer on the table. With multiple offers, a player has a fallback in case one negotiation doesn’t go well. If a player has their heart set on one team, they can use the other offers as leverage to win a more favorable deal with their dream team.
When it comes to procuring endorsement deals, talking to different brands gives the player some competing options. The athlete not only gets to pick the brand with the most lucrative offer but also one that aligns best with their values.
Find Common Ground
The best negotiators seek win-win solutions. Even as you fight for what’s best for you, consider clauses and ideas that bring the most benefit for the sports team and brand.
With most sports, contracts last years, and the earning potential can ripple out into retirement. You will likely want a happy collaboration rather than one side feeling cheated. When the team feels they got a great deal, they’re likely to want to work with you longer. A win-win contract can keep you and your team motivated, boosting your performance to exceptional standards.