Negotiation: Who's in Control? - Procurement People
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Negotiation: Who's in Control?

In every industry there is always an opportunity to negotiate, in recruitment we negotiate on terms of business to supply staff whether it be on a permanent or contract basis and in procurement negotiation is a key tool to achieving value for money.

Premier league footballers sign contracts for obscene amounts of money normally negotiated by their agents and those of you who follow Premier League football might remember when Carlos Tevez and Javier Mascherano came to the Premiership.

The two footballers were owned by Media Sports Investment (MSI) founder Kia Joorabchian, this wealthy business man organised the transfer of the players to West Ham from the club MSI owned, Corinthians. At the time MSI were in talks to takeover West Ham football club and this was before Tevez and Mascherano had signed for West Ham. On the one side, West Ham negotiated before any takeover was in place the MSI company could have no say in the clubs playing or transfer policy and on the other side MSI reportedly negotiated that the two players could be retained and the power to transfer either player during the players contracts was still with the third party owners.

The season Carlos Tevez spent at West Ham football club proved to be invaluable, Carlos Tevez made a handful of top class performances and this resulted in West Ham staying in the premiership, on the last day of the season he scored the winning goal away at Manchester United and subsequently Sheffield United were relegated. The following season Sheffield United filed for legal proceedings against West Ham Football Club and the latter club paid a five and a half million pounds fine rather than a five point reduction.

Before any negotiation it’s important to understand what you are looking to get out of it; what is the worst and best possible outcome? I’m sure West Ham football club were fully aware of the risk they were taking in signing these two players. Rightly or wrongly both parties in this saga got great value for money, West Ham Football Club maintained roughly between 10-15 million in TV rights  for staying in the Premiership, Kia Joorabchian of MSI eventually took Mascherano and Tevez to different clubs the latter signing for Man Utd where he negotiated a deal which meant his investment company pocketed around 4 million a year in image rights.

Kia Joorabchian is an extremely powerful negotiator, this story is just one of many football acquisitions and transfers dealings he has been involved in. You can argue whether this negotiation was ethically correct, did both parties know what they were set to gain or set to lose way before the transfers went through and was this just adding to the power of clubs and players who continue to go above and beyond rules and authority in football when large sums of money are involved?

I’d be interested to know your thoughts, have you ever taken a risk which meant you were set to gain more than you were set to lose in a negotiation of a product or service?

The next time you enter in to a negotiation with a strong negotiator make sure you’re fully prepared, you know the best/worst possible outcomes, what you can agree to and what you cannot agree to.

If you are a Procurement Professional looking to discuss your career options or you are looking for support in making your next hire why not give us a call on 0121 2728260

By Greg Kneuss – Consultant