What seems to be the never-ending story of cities paying to have sports franchises play in ballparks, arenas, and stadiums is an exciting one for fans, but a sad one for city budgets. Too often cities get caught in the trap of negotiating against themselves to save a franchise from leaving to another location. Here are five ways cities and sports franchises can do better to save money by entering better deals.
1. Hire outside counsel and experts
Research, preparedness, and negotiation skills are the three ingredients to brokering a great deal. Being prepared is 90% of any deal, trial, negotiation, arbitration, etc. In fact, everything in life is about being prepared for the opportunity and/or challenge(s). Hiring outside counsel and experts to research and offer opinions can make for more well-informed managers.
2. Understand history and performance
Before signing on the dotted line, all parties should know the history of bad dealmaking in the sports franchise venue space. On the one hand, cities being stuck with debt. On the other hand, sports franchises being stuck playing in old and broken down venues. Wrapped in that analysis, there is also data to be collected as to how sports franchises and cities perform on and off the field when playing and developing in a new venue.
3. Have multiple offers and options
Negotiation 101 consists of one major component, options. If all one party has is one option without the ability to bluff, that party’s position is weakened and will be more willing to enter into a bad deal to save face, the deal, etc. Multiple offers and options create opportunities to come to an agreement that is kinder to both sides. The takeaway here is that asking for something and standing up for a negotiation position with facts and data will not be done by someone else so negotiators must have or create options that lead to opportunities.
4. Use analytics and understand finance
The use of analytics and having proper experts in dealmaking and legislative finance are a must. Analytics is a part of nearly all entertainment, media, sports, and business decision-making. Negotiators and decision-makers must have and understand data analytics and what occurs when certain decisions are made. The aforementioned is also true for financing of any deal to build a new venue. Too often taxpayers get left footing the team bill by elected-leaders failing to understand the financial structure of a deal, particularly for contingencies when things go wrong. Again, hiring experts and being prepared run through the life and length of any deal.
5. Walk Away
Be willing to walk away from a bad deal. No deal is worth selling the future unless the franchise is willing to sell its future and obligations, equally. Note that any deal generally gets better with time and options.
