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20 years

Tuesday, November 30, 2010

Keep Derek Jeter. Don't negotiate in the press.

Why is it that smart people who should know better don't know how to keep from washing their dirty laundry in public?

The last couple of days have been relatively quiet, but last week was an embarrassing time for all involved. It started in the New York tabloids and then on sports radio - the contract negotiations between one of the most storied franchise in all of sports, the New York Yankees, and the its highly- regarded superstar team captain Derek Jeter. For those needing the background here are a few links to the NY Daily News, NY Post and even the NY Times. If you want a daily feed and the rants from sports fans, tune into WFAN in New York.

All that the entire episode continues to do is harm the reputations of both Jeter and the Yankees, and tarnish their brands.

In many management/union negotiations we've seen one side break the cone of silence when they perceive it in their interest. More often than not, this is the labor side when union officials think that going public will either score points with their membership or change public opinion. Our general advice to clients in the middle of negotiations is to learn multiple ways to say No Comment without uttering those words: "We can't comment on ongoing discussions." Or "Talks are progressing. We'll have updates on a periodic basis. It's our policy not to negotiate in public." Short and relatively sweet.

After this public negotiations concludes, we'll learn what the Yankees agreed to pay Jeter for 3-5 years, which will probably be the last contract of a very successful career. Unlike most modern-day sports stars, Jeter has only played for one major league team. He has helped the Yankees win 5 World Series while there and has achieved iconic status. He has been the current era equivalent to Babe Ruth, Joe DiMaggio, Lou Gehrig or Mickey Mantle in terms of what he means to the team.

The Yankees are the richest team in baseball if not all sports. They can afford Jeter. Arguably, retiring Jeter as a lifelong Yankee will be of tremendous benefit to the Yankees long after his playing days are over. So why is it that Yankee owners and management felt the need to publicly say that if "He's not happy here, he's welcome to negotiate with other teams." That's a standard negotiating ploy, betting that no other team will overpay Jeter the way the Yankees will in part reward him for what he means to the team, not just his statistical accomplishments or potential stats over the next few years. But that's not a good PR strategy. Jeter's posse felt the need the respond and hence the media and fan frenzy.

I agree with predictions that Jeter will ultimately sign a contract for 3-5 years and there will be a compromise between the $15 million a year the Yankees offered, and Jeter's request of $23-24 million a year. Jeter will save face and not look like he took a pay cut. The Yankees will vow that they never wanted to lose him. The bad taste will linger for a while; all will be forgotten if the Yankees win World Series and Jeter has great numbers. But why run the risk when the potential reputational cost is so high?

Back to the point for non-sports negotiations: It's really okay to be consistent and firm in not negotiating in public. The key is to develop a communications plan for negotiations, write the FAQ documents, and rehearse spokespersons who can withstand the various different ways that reporters will bug you and ask the same questions.

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