Simone Halep’s Dress Negotiations and Effective BATNAs

Many observers wondered why Simona Halep wore a plain red dress, without sponsors logo, for the Australian Open tennis tournament which finished at the weekend. Halep, who was the world number one ranked player before the event, lost to Caroline Wozniacki in a truly epic and tremendously exciting final last Saturday. The answer illustrates a core principle of negotiation rather well .

The original report on the situation came in December on the website here. It suggested that Halep’s representatives expected and wanted an increased sponsorship offer from Adidas, who had sponsored the player since 2014, because she had achieved the number one ranking.

But when the offer from Adidas apparently did not match up to the Halep side’s assessment of her value, the deal was not concluded. The player’s team went off to find a better deal elsewhere, but unfortunately, there wasn’t anything more attractive around. So back they went to Adidas – who said “sorry, we’ve allocated our 2018 budget now, nothing left for you!” And that’s why she does not have a sponsor for 2018 and was wearing a red dress in Australia that she had made by a seamstress in China for the tournament.

The lesson for procurement and indeed any negotiators? Yes, it is our old favourite the BATNA – the “best alternative to a negotiated agreement”, as identified and defined by Fisher and Ury of the Harvard Negotiation Project in the classic book “Getting To Yes”.  Your BATNA is simply the most advantageous alternative course of action you can take if negotiations fail and an agreement cannot be reached.

Having a strong BATNA is an essential part of any professional negotiation strategy – or at the very least, making sure that the other party think you have a strong BATNA. (That is what really matters; their perception of how strong your own BATNA and therefore negotiating position is.)

In this case, it looks like Halep’s people did not have a strong BATNA. Whether or not Adidas actually knew that, they called their "opponent’s" bluff and exposed the lack of an immediate alternative for Halep. We would suggest that work should have been done to establish the options before the key Adidas discussions, so if those were not successful, there was another deal immediately available for Halep.

Now there are reports that a new deal with Nike is just around the corner, which could be worth substantially more for the player than the Adidas offer. So maybe this all will end happily and it will go down as just a short-term timing issue on the negotiations and the deals.

But the lesson still applies. If you are going to push the other party in a negotiation, you must be ready for them to walk away, and you need to have a realistic alternative ready to go if there is any criticality in the situation (as is often the case in procurement negotiations of course). And remember that sometimes both buyers and sellers do walk away from negotiations because agreement cannot be reached - suppliers won’t always accept your demands.

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