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Who holds the aces in the three-way negotiation between Arsenal, Cesc Fabregas and Barcelona? Ultimately, outstanding footballing talent carries a huge amount of bargaining power, but the two football clubs involved still hold some powerful cards.

There is of course a 3-way negotiation going on.

In the negotiation between Fabregas and Barcelona, Fabregas holds the ‘market power’ associated with being an outstanding talent in a limited pool of exceptional players. Demand exceeds supply for a resource such as his. Barcelona have some market power of their own though. They are arguably the best club side in the world currently, with a midfield packed full of international stars. They are also the desired point of entry for Fabregas back to his native Spain. This gives them a certain amount of ‘network power’ – as gatekeepers to a grouping to which Fabregas wants access. I would assess the balance of this negotiation as a 2-2 scoring draw.

What about the balance of bargaining power between Arsenal and Fabregas? The market power that Fabregas has as a key talent is even greater with Arsenal than Barcelona. Having failed to win a trophy for 5 years will have weighted another key aspect of bargaining power against Arsenal. They need to retain a talismanic talent like Fabregas. The negotiating authority that Arsene Wenger would have had when Fabregas first joined the club as a 16 year old will have diminished, not just as a result of the Spaniard’s maturing talent, but also as a result of Wenger and Arsenal’s comparative lack of success over the last 5 years. I would score this negotiation 3 Aces to 1 in favour of the player.

And the balance of power between Arsenal and Barcelona? Barcelona have […]

Another week of turmoil at British Airways, involving record losses of over £500 million, more industrial unrest with Unite, and culminating in a near-riot by bitter airline staff at ACAS on Saturday night.

This dispute has now been running for over 15 months. This is highly unusual in post-Thatcher Britain, with all its obstacles against Union-organised strikes. What is going on here? The parties seem to have got themselves into a spiral of ‘lose/lose’, where it’s more important to damage the other side’s interests than to secure their own. If that’s the case, then how on earth are they going to break that cycle and strike a deal?

The headlines this morning were all about the ACAS Headquarters being invaded by ‘left-wing’ protesters, jostling and abusing Willie Walsh. They had apparently gathered as a result of Derek Simpson tweeting about the progress of the talks from the negotiating room.

From a PR point of view, the incident is a gift to Willie Walsh. It enables him to continue to paint Unite and its fellow Stewards and Stewardesses Union, BAASA, as extreme, divided and unreasonable. He could also be seen on the Andrew Marr show on Sunday morning, piously declaring how shocked he was to find Unite’s Simpson tweeting the confidential nature of the discussions in real-time. Some commentators have even been moved to sympathy for Walsh as a result of him being cornered by militants in this way.

However, it may be more revealing to consider why this behaviour is happening, rather than just condemning it out of hand.

This kind of gratuitously aggressive behaviour looks like it results from a ‘lose/lose’ attitude. This is the kind of attitude that develops when one party to a negotiation feels that […]

The true and parlous picture of Manchester United’s debts has become a little clearer over the past few weeks. The highly leveraged takeover of the club by the Glazer family has turned the club from one of the wealthiest in the world into a beast burdened by over US$720 million of debt. The club has become liable for US$460 million in interest, fees and charges since the Glazers acquired it in 2005. Are the Glazers showing any signs of being bothered by this? No. Are they looking to bale-out by accepting an offer to sell the club and walk away? Almost certainly not. Why? Because a sale at anything less than a ridiculous price would be unlikely to meet their negotiating needs.

Two attempts have been running in parallel to oust the Glazers. Firstly an increasing number of club supporters have symbolically adopted the “green and gold” colours of the club’s spiritual fore-runner, Newton Heath, and vocally called for the Glazers to go at a succession of home matches. This group, orchestrated by the Manchester United Supporters Trust has created a hostile atmosphere which the Glazers’ have so far pointedly ignored. Secondly, the band of potential investors called the “Red Knights”, led by Goldman Sachs banker, Jim O’Neill and consisting of high net worth individuals who are all Manchester United fans, has created a consortium to buy the club. Reportedly, they were preparing to put together an offer of £1 billion to buy the club until the Glazers let it be known through the media that they were uninterested in selling-up at anything less than a valuation in excess of £1.5 billion. Why would this be? The answer is that the Glazers appear to have […]

The proposed deal for News Corp to buy out the other existing shareholders at BSkyB throws up some interesting scenarios in relation to the participants’ needs and how they can best be met. A quick look at the needs, bargaining power and behaviour patterns on all sides suggests that a deal will be forthcoming. But how this might be viewed in any investigation by the Competition Authorities is another matter.

Looking at the needs of Rupert Murdoch’s Newscorp it would seem that a familiar pattern is being played-out. The deal would provide a source of cash from BSkyB’s operations which are forecast to grow rapidly – by as much as 70% over the next 2 years. This would no doubt be useful to Murdoch’s media empire at a time when there is a reassurance need for cash-flow, as newspaper revenues plummet all over the world, and the jury remains out on whether this trend can be reversed through the introduction of the kind of “pay-walls” recently introduced by Murdoch for The Times newspaper.

In terms of other personal needs, there is no need to dwell long on the partial satisfaction of Murdoch’s ‘achievement’ need which this deal would also represent. The man has been executing headline-grabbing and ground-breaking media deals for 60 years, and is not likely to stop scratching that itch until he is 6 feet under, at the earliest. The deal is also another gratifying instalment in the saga of the Murdoch Dynasty, a family that loves to be seen to be commanding respect and attention.

That brings us to James Murdoch, who as CEO of BSkyB finds himself in an interesting position. It is hard to believe that Murdoch’s bid would have been […]

What next for the Euro? As forecast in this blog, the Euro-zone countries have been forced to stump up a massive rescue package in order to avert a sovereign debt crisis in Greece and other Euro-zone countries. Will that be enough? Possibly not, if the continuing state of unease displayed by the financial markets is anything to go by.

In this ongoing tacit negotiation between the Euro-zone countries and the financial markets, one problem is that the Euro-zone “negotiation team” need to project an air of certainty and conviction about their commitment to the Euro and each other. Yet the key members of that team, President Sarkozy and Angela Merkel, look about as united as Katie Price and Peter Andre.

Any disunity in the team on one side of a negotiation will always be picked up by the other and exploited to its disadvantage. So, irrespective of their differences, Sarkozy and Merkel need to stop looking like the Odd Couple, and start looking like a dream team, or they will inadvertently prolong the very crisis they are seeking to bring to an end.

Together with the IMF, the EU has created a loan-and-guarantee package worth €750 billion. This is intended to stop international money markets forcing up government bond interest rates – in Greece, Spain and Portugal – to such unsustainable rates that their debt collapses under its own weight, and sparks a wider Euro-zone debt crisis.

The package included €220 billion provided by the IMF, €440bn of government-backed loan guarantees and a commitment for the European central bank to buy European sovereign bonds. What’s more, to combat rising financial market tensions triggered by market fears over public finances in the weaker Euro-zone countries, the EU decided to […]

Are we any closer to a peace deal in Afghanistan? Probably not, though it’s no surprise to find the beleagured Allies wishing and hoping that a deal was possible after a month in which Nato troops suffered their worst ever losses (102 brave men killed in June). The problem is that the ingredients for a negotiation are simply not present.

The new commander of the Nato forces in Afghanistan, General Petreus, has an unenviable task. He is expected to wage a war that makes us look like we are winning, when we are not. He is also expected to create the conditions for peace, so that there can be a phased withdrawal by Coalition troops – which President Obama has signalled is to begin from the middle of 2011 onwards.

Yet this withdrawal can only happen if either (A) a peaceful solution is negotiated or – Plan (B) – the Afghan army is trained to the point where it has the capacity to lead the fight in the absence of Coalition troops. The Coalition has been enthusiastically talking up this possibility, but it seems somewhat remote. So, at the same time they have been equally enthusiastically clutching at any indication that peace talks are on the cards. Much has been made, for example, of the recent 3 day peace assembly or “Jirga” which took place in Kabul at which 1,600 delegates voiced their approval of President Karzai’s 156 page peace proposal. Optimism has also arisen as a result of unprecedented talks between Karzai and Pakistan’s General Ahmed Shuja Pasha (the head of their Intelligence Agency) about how Pakistan might mediate with Taliban insurgents based in its territory.

However, any optimism concerning peace talks is surely wishful […]

The publication of Peter Mandelson’s memoirs of New Labour, “The Third Man” gives a fascinating insight into the mind of a great negotiator. It also reveals that even this master negotiator has some weak spots.

Peter Mandelson has successfully negotiated his way through more than a dozen years of Labour being in power, displaying enormous deal-making skills.

The perfect negotiator has all the possible negotiation behaviours at his finger tips. He can push for things when he needs to, using behaviour such as creating incentives or pressures for people to comply with his wishes, or making proposals with reasons to back them up. Sound familiar? He can also work off the other side’s agenda – actively listening, focusing on common ground and disclosing information or feelings to put people at their ease. Peter Mandelson has been able to display all of these behaviours too – particularly during his most recent stint in office, when he has been a paragon of easy-listening charm.

Great negotiators also have an instinctive grasp of negotiating process. They understand the value of planning – and Peter Mandelson has always appeared to plan all the way to the end. They know when to explore and how to identify and then exploit the other side’s needs. They know when and how to bid, bargain and close their deals.

Great negotiators also know the difference between “winning” and “losing”, and that “retreating” is not the same as losing. On both occasions when Mandelson has had to leave Ministerial office he has done so without fuss, knowing that his time would come again, and, on the occasion of his second resignation, knowing that a juicy EU Commissioner’s job lay just around the corner.

Master negotiators are also supreme […]

On the face of it, the takeover of Channel Five by Richard Desmond for a price of £103.5 million is a great example of two well-matched parties ending up with an agreement that suits both of them. . However, dig a little deeper and it would appear that Five’s owners, RTL, have got the better of the deal, by exploiting their “coinage” more effectively than Desmond.

“Coinage” is the currency used to make deals. Any win/win deal requires that the underlying needs of the parties to be met.  These are not just the outward expressions of what the parties say they want (things like price, delivery and quantity) but the underlying needs that drive the parties.  “Coinage” consists of concessions which have a high value to the receiver (because they meet one of these personal needs) but a low value to the giver – to whom they are the equivalent of loose change..

Looking at RTL’s needs in the negotiation it is not difficult to detect a need for “security”. Five has been shipping cash for some time – caught in a bind between falling ad sales, lack of scale and lack of funding to create original programming or expensive acquisitions. Its value has been written down by almost £400 million in the last two years. It lost £9.1 million last year and it has only 8% of the TV ad market. This cannot have been comfortable for parent company, RTL, part of the Bertelsmann family. And it certainly does not fit with Bertlelsmann’s normal, cautious approach to business.

From Richard Desmond’s point of view the […]

Secrets Of Negotiation To Be Shared With UK Start-Ups
Simon Cowell’s Lawyer Clive Rich To Share Professional Deal-Making Insights
London, 4th March, 2011 – Clive Rich, the leading UK media lawyer and driving force behind successful deals for Simon Cowell, Sony, MySpace and The Royal Opera House has today announced the launch of Secrets Of Negotiation, a new series of seminars aimed at sharing professional negotiating skills with UK start-ups, SMEs and entrepreneurs.

The new events, which start on the evening of March 16th in London, will provide attendees with the ability to recognise the key stages of a deal and the skills to move through them successfully. It will also deliver tips on how to take control of negotiations and share insider knowledge on how to influence the opposition in order to gain the winning edge and close deals successfully.

Clive Rich added; “Sound negotiating skills are critical for all sorts of situations relevant to SMEs, start-up companies and entrepreneurs, including funding agreements, licensing deals, distribution deals and exit plans. But for whatever reason, deal-making is something that is still generally done by instinct rather than learned skills or training. I have launched the Secrets Of Negotiation seminars in order to share the skills I have gained over years of negotiating with some of the world’s toughest opposition in media, entertainment and business.”

Event attendees will also be introduced to the ‘Close My Deal’ iPhone negotiating app which provides interactive tools and content to help start-ups, SMEs and entrepreneurs achieve the best possible deals in the course of real-life situations.

The ‘Secrets Of Negotiation” events are presented in partnership with entrepreneur and leading human behaviour coach James Stokes. The first session will be held on the evening of Wednesday, […]