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5 Lessons From Cricket's Pay Dispute If You Want To Lose Big In Commercial Negotiations

Cricket Australia reduced the art of good negotiation to Ashes.

07/08/2017 1:44 PM AEST | Updated 08/08/2017 9:12 AM AEST
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Cricket Australia CEO James Sutherland (L) and Australian Cricketers' Association CEO Alistair Nicholson attend a press conference in Melbourne on August 3, 2017.

Agreement in principle on cricketers' pay has finally been signed between Cricket Australia -- the body that is meant to run the game -- and the Australian Cricketers' Association -- the players' representative body.

If the terms of agreement reported in the press are anywhere near correct, the result is a humiliating defeat for Cricket Australia. CA was determined to destroy the revenue-sharing model that lay at the heart of the old contract with the players. The result of the negotiations is not only that the model has been retained, but that the players will take a larger share of revenues than before.

As a professional dispute resolver, I've been observing the dispute with keen interest. Cricket Australia's behaviour during the negotiations provides five lessons in how not to conduct a commercial negotiation.

What has the cricket pay dispute taught us? Follow the five easy lessons above and you're almost guaranteed to achieve a worse result than if you'd simply agreed to extend the players' existing contract.

Lesson One: Let your only income-producing asset walk out the door. CA makes its money by selling the rights to broadcast the cricket matches it puts on. It can't stage cricket matches without cricketers giving it the right to broadcast their performances. No players, no matches, no broadcast rights, no revenue. Despite this, CA let its existing contract with the players expire on 30 June without, apparently, any attempt to keep the players under contract while CA and the ACA negotiated a new contract.

Result? The players became free agents on 1 July; they signed over the rights to broadcast their games to the ACA; and, suddenly, CA had no product to sell to sponsors -- but the players' association did. It was never going to take sponsors long to realise that CA had nothing to sell them. CA thus instantly reduced its bargaining power and, the more time passed, the weaker its position would become. All of this was utterly predictable and preventable.

Lesson Two: Reject mediation at every possible opportunity, believing that this makes you look tough. According to press reports, the players' association requested mediation with CA on at least five occasions and, every time, CA rejected the suggestion. But agreeing to mediation is a sign of strength, not of weakness. Agreeing to mediation means you're not afraid to sit down across the table from your opponent, look him or her in the eye, and calmly discuss strengths, weaknesses and mutual opportunities. Rejecting mediation bespeaks insecurity and weakness.

Lesson Three: Use the media to abuse your opponents and the media. At a critical stage of the negotiations, the Chairman of CA published an extraordinary rant in The Australian in which he accused the players' association of "launching a campaign of such sustained ferocity that anyone could be forgiven for thinking that CA was proposing the reintroduction of slavery".

He also said that the myth peddled by the players' association had "been uncritically regurgitated by some mainstream journalists and commentators who should know better".

Doing this breached a golden rule of commercial negotiation: Whatever you think of your opponents, be polite and respectful to them. After all, you're trying to make it easy for them to agree with you, so that you can get what you want. Publicly humiliating your opponents is about the worst thing you can do. And abusing the media, on which you depend for coverage of the dispute, is about the second-worst thing you can do.

Lesson Four: Don't send your top negotiator to the negotiations. Send someone sufficiently junior so that there will be real doubt on the other side whether they actually represent your views. CA did this by not sending its chief executive James Sutherland to the negotiations until very late in the piece. This sent two bad messages to the players: First, CA wasn't serious about resolving the dispute. Second, it was hard to know whether the negotiator sent along by CA actually spoke for CA's Board. Both messages were tailor-made to infuriate the players' association and slow the negotiations to a crawl.

Lesson Five: When you're really desperate, demand arbitration. Then everyone will know for sure that you're really desperate. Late last week, CA out of the blue announced that, if the dispute wasn't resolved by early this week, it would demand that it be sent to arbitration. This was a truly crazy thing to do, for lots of reasons.

First, CA had no way of forcing the players to arbitration and it and they knew it. The threat was an empty one. Making empty threats hurts no-one but yourself.

Second, it made clear that CA still thought that this was a common-or-garden industrial dispute, rather than a negotiation with the best cricket players in Australia, perhaps the world, whose outcome would determine whether CA ceased to exist.

Third, time was critical if the Bangladesh and India tours and the Ashes were to proceed. But arbitration is slow; it is fantastically expensive; and its results are unpredictable.

Fourth, this was a commercial negotiation, with no right or wrong outcome, not a dispute about who bore legal responsibility for the loss of a cargo of tangerines. Why would you entrust the outcome of your commercial negotiation to some retired judge? Fifth, making such a crazy suggestion telegraphed to the world that CA was desperate.

Anyway, the rest is history. Not long after CA revealed the depths of its desperation by demanding arbitration, agreement in principle was reached on a new contract whose terms strongly favoured the players.

What has the cricket pay dispute taught us? Follow the five easy lessons above and you're almost guaranteed to achieve a worse result than if you'd simply agreed to extend the players' existing contract.

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Robert Angyal SC is a Sydney barrister and mediator. The highest-ranked cricket team he ever played in was the Under-13is -- as in a, b, c, d, e, f, g, h and i.

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