The first games of NHL pre-season have come and gone and Matt Duchene still is a member of the Colorado Avalanche, despite Duchene being the most visible asset on the trade market and possibly the best player available dating back to the middle point of the 2016-17 season. Meanwhile, Josh Anderson, after having one solid campaign in the bottom six for Columbus remains one of two unsigned, restricted free agents. How is this possible?
Both instances show the delicate balance in negotiating a deal. I’m not an NHL GM, but I play one on the Internet. When I’m not doing that, as a lawyer, I spend my days negotiating deals. There are many different negotiating styles, but there are certain basic principles of negotiations that are important regardless of style. Most people are at least familiar with the concept of leverage—the idea that parties in the negotiation have different strengths and weaknesses based on their circumstances. However, there is a more basic concept that should ultimately guide parties in a negotiation, which I’ll refer to as “BATNA”—the best alternative to a negotiated agreement. To be clear, this isn’t something I created, it goes back to the Harvard Negotiation Project and the book Getting to Yes.
BATNA is, in short, the best result you can achieve if negotiations fail. A rational negotiator won’t accept an offer that falls short of their BATNA because they are better off not closing the deal. In the Duchene trade talks we have heard a lot about how Joe Sakic can just keep Matt Duchene. To this point, that is exactly what he’s done. The party line is that if Duchene has a good year, Sakic will see offers improve and so he is reasonable to hold out for a deal equivalent to what he thinks he can get if Duchene’s play improve.
However, this isn’t a fair understanding of how BATNA works. Sakic also has to consider other factors. For example, if Duchene has another poor year, how would that impact his trade value? If Sakic can’t trade him until next offseason (more on this below), how would that impact his trade value? What if Duchene gets injured? What if other comparable or better players come onto the trade market in the interim (ex. John Tavares or Ryan Nugent-Hopkins)? What if the trade pool shrinks as some teams address their need at center internally or because a team no longer has the asset Sakic wants to complete the deal?
Sakic’s worst case BATNA is pretty bad. If Duchene has a poor season (not improbable on a team as bad as the Avalanche) or gets injured (not uncommon in the NHL), Duchene’s value could go down to close to zero. If John Tavares and Ryan Nugent-Hopkins are suddenly on the market with Duchene, demand for Duchene will decrease even if he otherwise has a good year. If teams like Columbus find an internal solution for their current needs at center (not unthinkable for Columbus in particular because of the presence of Pierre-Luc Dubois), the market for Duchene could take a further hit. We’ve already seen Nashville’s interest diminish as they lost the depth at defenseman they needed to complete a deal. Keeping Duchene beyond training camp is risky business.
Now, let’s look at the case of Josh Anderson and his agent, Darren Ferris. Anderson had a nice year, but trailed off as the season moved on. He has no arbitration rights. He would seem to justify a deal less than Connor Brown, who just got a deal for $2.1 million/year over three years. It’s unclear exactly where the parties are at other than a report that suggested the Jackets have given Anderson two options—a one year deal at his qualifying offer and a three year deal of “less than $1.9 million” (which sounds like agent speak for $1.85 million). That second option sounds pretty close to market. Yet, Anderson continues to hold out and his agent is now threatening that his player will play in Switzerland and then the Olympics.
When we look at Anderson’s BATNA, it becomes obvious that this is either a bluff, or an incredibly foolish move by Ferris. Anderson’s salary in Switzerland is likely to be a maximum of $500,000. Even Anderson’s qualifying offer is higher than that. And what does Anderson gain by spending a season in Switzerland? Nothing. He still won’t obtain arbitration rights. What if he has a poor season in Europe, in a subpar league, or gets injured? What if Milano, or Abramov or some other Jackets prospect simply takes Anderson’s roster spot and makes him expendable? The bottom line is that the Jackets negotiating position won’t get worse, but Anderson’s certainly could.
Sometimes pride can get in the way of making a deal. This is almost always a bad idea. As an attorney, I may come to hate the attorney on the other side, but it is my job to do what is best for my client regardless of those feelings. Sakic and Ferris need to think about the best interest of their “clients”—the Colorado Avalanche and Josh Anderson. Sakic needs to make a move on Duchene now rather than risk finding his return further diminished. Ferris needs to get his client a deal that keeps him in the NHL and doesn’t waste hundreds of thousands of dollars for nothing.
Another piece of negotiating advice that a former partner who practiced in the bankruptcy arena once gave was “always give the other side enough money for cab fare home.” What does that mean? It means that when you are the party with superior leverage, it is important to afford the other side some amount of dignity in “defeat.”
Jarmo Kekäläinen is in a position to potentially resolve both of these issues in one move, but to do it he will have to give the other sides money for cab fare home. For Sakic, that will mean giving him something that he previously asked for in negotiations and was denied—Anderson. In the most recent 31 Thoughts column by Elliotte Friedman, he stated: “It is believed, for example, that Colorado asked for [Anderson] in Matt Duchene talks, only to be rejected.” The status of the negotiations between Columbus and Anderson have created an opening for the two parties to re-engage in discussions of a trade that would include Anderson. Sakic, in turn, will have to accept Ryan Murray instead of Gabriel Carlsson. I get why Sakic wants the younger player and I don’t think it has as much to do with perceived skill as time horizons for being competitive and control of the player through contract, but he can’t expect to get a Anderson AND a player on an entry-level contract. It seems likely that a pick would be a part of the deal, with the possibility that a pick might come back to the Jackets to even things out. I’d also consider the possibility of adding a player like Dean Kukan given the lack of organizational depth on the blueline for the Avs. Sakic can crow that he got “4 assets” as he initially set out to do (even if he also sends an asset back) and he can proclaim that the moment that the deal came together was when Anderson was added. People will praise Sakic for holding out to get what a better deal though no one will ever know for sure what other deals were passed up along the way or pulled off the table. Sakic will get the left defenseman he needs and a player who could put up 20 plus goals if moved into the Avs top 6, essentially replacing Duchene’s production from last season. He’ll have both on reasonable terms for years to come.
And what of Darren Ferris? He may well end up signing the exact same deal that Jarmo already offered his client in Colorado, but the public will be none the wiser since Jarmo has never gone public to say what that offer was. He may not like dealing with Jarmo, but he should also respect the fact that Jarmo didn’t make a fool of him in the newspapers, which he certainly could have.
Meanwhile, the Jackets shore up their depth at center, while giving some of their depth on defense. Defensive depth is always something that can be added at the trade deadline (particularly the bottom pair), so it is a reasonable trade-off. Is it a lot to give up? Yes. Is the team closer to being a contender after the trade? Also, yes. The longer the Anderson situation plays out, the more this option could and should be considered by the Jackets. The question then is whether Sakic can see a trade with this sort of framework for what it is—the best offer he is likely to obtain that minimizes the negative effects of his best alternative to a trade.
One reply on “Columbus, Duchene, Anderson and the Delicate Art of Negotiations”
[…] I was discussing the stalemates with Matt Duchene in Colorado and Josh Anderson in Columbus (See here). One thing I failed to mention in that article was the role for Darren Ferris in the […]
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