Gareth Bale transfer – Spurs work on their BATNA

I smiled when I heard football club  Tottenham Hotspur (Spurs) claiming this week that another club was interested in buying Gareth Bale. Note to readers who aren't football fans - don't go! This isn't really an article about football!

It appears that Spurs and Real Madrid are in the final stages of negotiation over Bale's transfer, with the fee likely to be around £80 million. Everyone seems pretty certain it will happen, so there was some surprise at this new interest from elsewhere. And that's an  unspecified and non-specific “elsewhere” also...

But as procurement professionals, we can of course see exactly what Spurs are doing. They are improving the strength of their BATNA - the best alternative to a negotiated agreement, as defined by Fisher and Ury in their seminal negotiation book, Getting to Yes. They are, in effect, saying to Real Madrid that they have decent alternatives, including someone else who is interested in paying stupid amounts of money!

Having a good, strong BATNA plays a huge part in defining the strength of your negotiation position. Suppose it was well-known that no-one else was remotely interested in Bale. Suppose - an even more extreme example - that Spurs desperately needed the cash  as well (absolutely not true in real life!) But in that situation, how would Spurs BATNA look?  Really not very strong, and the fee being discussed would not be anywhere like £80M.

But the other interesting point is that it isn't really how good your BATNA is - what is critical is how good the other party thinks it is. So it is interesting that we don't know who this other party is ready to jump in. Of course Spurs wouldn't just invent this other bid, would they? But the key thing from a negotiation point of view is that Real Madrid believe, or at least have a reasonable suspicion, that Spurs actually do have a feasible alternative - the BATNA. That keeps some negotiating power in Spurs' hands.

So there we go - another nice example of the principles and practices of procurement coming into our lives and the national news. But let's not get into the value for money issues around paying £80M for a guy who has basically had one good season in the Premiership...!

Voices (3)

  1. Ian R:

    It’s also interesting how they have used their negotiating position to put their competitors at a disadvantage. With the transfer deadline looming the longer they take to string out the “rival offers” or “just fine tuning the contract details”.,the less likely this piece of business is able to provide a catalyst of activity of other transfers. I’ve been surprised at how many times this preseason we have heard “we are trying to sign players but no one wants to sell.”

    It would be interesting to see how the wider procurement world would cope with a “transfer deadline”?

    1. Peter Smith:

      Ian
      The competitive advantage aspect of delaying the decision is a really interesting point that didn’t occur to me. So the equivalent perhaps of reserving production capacity,without a firm commitment, so that the supplier(s) can’t work with your competitors? I thought the Bale delay was just a bit of brinkmanship within the negotiating process but I suspect you may be right.
      Peter

      1. Dan:

        I think the delay also helps control price inflation of replacement players – if they sold Bale first, then all the other clubs would know they had £100m to spend and were desperate for top-drawer players. That would have pushed the prices up (think of Man U selling Ronaldo then spending £16m on Valencia)

        Instead they’ve bought their replacements before the sale and could claim in negotiations that they didn’t have that much money and the deal could still fall through etc.

        A healthy approach to risk management from Spurs? If the Bale deal falls through they could be stuck with £100m worth of players they don’t have the money for, but if they pull it off, it’ll save them a fortune.

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