Case Study Analysis Part A: “Power Play for Howard” The case study, “Power Play for Howard” describes the high-staked lengthy negotiation process for a new contract and competitive wages for Juwan Howard, all-star free agent forward for the Washington Bullets. Team C will discuss in detail the negotiation process, evaluate the tangible and intangible benefits, and assess the costs and risks through the perspectives of Juwan and the general managers of the Washington Bullets and Miami Heat teams. The end-result of the deal with Juwan Howard is one of the most lucrative free-agent signings in the National Basketball Association (NBA) history.
Case Summary The “Power Play for Howard” case study introduces the legend of the National Basketball Association (NBA) player Juwan Howard during his contract negotiation. A number of dynamics contribute to the basis of this momentous case with Howard. He was known for his positive outlook during all of career and became a much-loved dignitary within the community. Howard’s age and level of skill caused others to think that he would only progress even more as he continued to play in the league. These very reasons provided a strong foundation for negotiating his new contract.
Another factor contributing to the significance of this case is the union for NBA players was in the midst of discussing a new collective bargaining agreement, as a result providing the opportunity to achieve receiving an increased salary. The Washington Bullets encompassed a rare negotiating stance During the 1996-1997 basketball season, Howard became a free agent. Even though Howard openly declared that he wished to remain with the Bullets, he did not settle for the contract offer provided to maintain his spot on the team. Given his record, Howard believed that his worth was more than the team wished to offer.
Another team, the Miami Heat showed interest in Howard and offered a higher contract than the Bullets. As an attempt to negotiate, the Bullets increased their offer but did not match the offer provided by the Miami Heat. Howard later signed a $101 million contract with the Heat, but later negated due the NBA stating that the Heat surpassed its salary cap. August 1996 Howard gave into the Bullets and re-signed a contract for $105 million and chose to take legal action against the NBA in regard to the Miami Heat contract. The league permitted Bird rights, named in honor of Larry Bird, hich provides the power to provide compensation above the salary range in an effort to maintain a player currently under contract. This concept allows the NBA to retain members of its franchises within their communities and compensates players for their loyalty while creating a brand for the players and the NBA teams. Tangible and Intangible Benefits Evaluation – Kristina Evaluation of the Costs and Risks – Perspective of Juwan Howard – Amy Evaluation of the Costs and Risks – Perspective of General Managers Prior to negotiating, it is crucial for each party to assess the risks involved in the negotiation.
This will aid negotiators in establishing a target point and a resistance point for their negotiation strategy. Optimally, achieving a successful outcome will result in both parties receiving a fair settlement and committing to the terms of the agreement. Pat Riley, Miami Heat’s general manger faced many risks while negotiating the contract of Juwan Howard. By exceeding the NBA’s salary cap, Riley compromised the league’s standards, possibly resulting in arbitration. Facing arbitration, Riley jeopardized losing team players, facing fines, and receiving a suspension. If an arbitrator and appeals panel upheld the NBA’s allegations regarding the alleged Mourning agreement, the league could void Mourning’s contract, fine the club $5 million, suspend Riley for a year, take away draft picks—and still leave the Heat without Howard” (Lewicki, Saunders, & Barry, 2007, P 623). Another risk involved in the negotiation was jeopardizing the morale of the team. By offering Howard extreme perks, such as suites and limo rides, Riley placed Howard on a higher scale than the rest of the team players. This could result in jealousy and animosity against Howard, and possibly a lack of team work during the games.
Wes Unseld, Washington Bullets’ General Manager also faced many risks during the negotiation of Howard’s contract. He definitely weighed the risks against the values while contemplating the terms of the contract. By offering Howard a considerably lower salary than the Miami Heat, Unseld risked losing a long-time player, and asset to the team. This also jeopardized the relationship between Howard and Unseld. During the negotiation of Howard’s second contract, Unseld faced the possibility of losing Murray and Williams’ contracts and forfeiting his first-round draft pick for the 1997 season.
Luckily for the bullets, the Larry Bird Rights were reinstated, resulting in a win-win situation for Howard and the Bullets. “The league and union also agreed to restore the Bullets’ Bird rights and allow Murray and Williams to remain with the Bullets” (Lewicki, Saunders, & Barry, 2007, P 624). He did however decide that the value of retaining Howard far outweighed the risk of surrendering the 1997 first-round draft pick. Conclusion References Lewicki, R. J. , Saunders, D. M. , & Barry, B. (2007). Negotiation: Readings, Exercises, and Cases (5th ed. ). Boston: McGraw Hill.