Chelsea had to mitigate other influences to enforce a contract with Diego Costa © PA Wire/PA Images
Chelsea had to mitigate other influences to enforce a contract with Diego Costa © PA Wire/PA Images

What procurement can learn from football

posted by Jeremy Smith
21 July 2017

I am often lost for words when watching how football clubs must undertake player negotiations so publicly in the face of influences such as fan opinion, agents, China, the media and the high levels of supplier dominance that some of the truly top players have.

Clubs are still making profits even in this time of inflationary salaries thanks to investment from China and the TV industry, so we know that effective negotiation is still a point of differentiation. For me, there are two key learnings that procurement professionals can take from observing how football clubs negotiate in areas of such player dominance.

Negotiation strategy 

Tottenham, who this season applied some basic contract management, secured their key assets to long term contracts before their negotiating position became stronger. What you’ll notice is that no-one heard a thing about the negotiations until they were complete – not a common approach in the Premier League when you compare the Ozil and Sanchez situation at Arsenal.

They controlled the agents and moved quickly before the fans started demanding an opinion. Such speed prevented the press from interfering and helped the players by defusing the clubs’ negotiation strategy. All of this allowed them to secure the future of their key players. 

On the reverse, the much-criticised Arsene Wenger seems to always deal with unrealistic demands from his own fans in every transfer window, which is then jumped on by the media, which drives up of the cost of any player. 

Put this into the context of B2B contract negotiations. Procurement professionals can apply these same tactics by ensuring they continually monitor their contractual relationships, move only when the power position is as favourable as it can, and ensure that they keep control of any stakeholders who can negatively impact the process.

Using factors other than base cost to influence negotiations

When footballer Diego Costa became aware of interest from China he used this to try and obtain a move or higher salary, yet Chelsea stood firm despite an alleged player strike and a threat of a breach of contract. Chelsea also went public so Costa’s reputation was at risk, making it much harder for him to allegedly make any threats to breach his contract. The reality is they just enforced the contract, but they had to mitigate other influences to do so.

Others such as Pep Guardiola point out that playing in a weaker league will not satisfy players’ competitive streak. Pep is right. For example, you can't play in the Champions League if you play in China. So, it’s about using the strength of your brand and the holistic opportunities you provide in attracting the best players, but also in negotiating for them.

Then there’s fan pressure. But as Matthew Syed said in the Times recently, any fan truly expecting player loyalty in the football world may not be thinking rationally, but emotionally.  Following Zlatan Ibrahimovic's man of the match performance in the EFL final, Jose Mourinho is aware that such results during contract negotiations only aid the player in making demands that may not be able to be met to retain players. He therefore suggested to fans to make their feelings known, to encourage Ibrahimovic to remain loyal to the club and to distract from the point of the negotiations.

Procurement can apply similar tactics by developing negotiation plans and scenarios that are not just focused on the commercial aspects, but take a broader view of other factors that could influence the contractual relationship.

These may be opportunities for additional scope, providing a testing ground for innovative projects, joint marketing opportunities or simply the opportunity to reshape how the relationship operates.

Throw into the mix distraction points, weighted priorities, linked concessions or neutering any perceived strengths that your opposite number may have, then the preparation and objective assessment of your opponent’s position, priorities and strengths allows a more beneficial outcome through pre-emptive action, analysis and options in negotiations.

There’s a lot more to football negotiations than what I’ve observed above, but taking these tactics and deploying them in our B2B negotiations is still relevant. We often operate in a more controlled environment than the clubs, so even if we just learn that we need to control the environment, that’s progress.

☛ Jeremy Smith is client director at 4C Associates

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