Harvard Business Review Reveals Negotiation Tactics in One of the Biggest Deals in Sports Media History

A CCW Digital Analysis



Matt Wujciak
11/11/2019

AT&T Stadium

Nearly 26 years ago to the day, one of the greatest business negotiators of the century disrupted the media industry for years to come. Rupert Murdoch, an Australian entrepreneur with no experience in American football, persuaded the NFL to abandon CBS and bet on the small and rickety company known as Fox. 

According to James K. Sebenius’ Harvard Business Review study, Murdoch had tried to buy NFL TV rights twice before, but he believed the league had not taken him seriously. Twenty-six years ago, a few years after his previous rejection, Murdoch brainstormed ideas that could help him enter the market. So he made a phone call that changed the history of the media industry.

 

Determining the people in charge

A much younger Jerry Jones, who had recently acquired the Dallas Cowboys, climbed his way onto the NFL’s TV rights committee and was  determined to maximize the financial return from selling broadcast rights. After Murdoch called Jones and the two went back and forth with negotiation strategies and mutual interests, Jones recalled years later: “[Rupert] said, ‘Jerry, I think I was a stalking horse last time. I’m not going to do that and be just a stalking horse.’” Jones continued: “I said, ‘Mr. Murdoch, I wasn’t a part of that negotiation. But I am [in] this one.”                                         

According to the Six Habits of Merely Effective Negotiators, “an associate of Rupert Murdoch remarked that, as a buyer, Murdoch ‘understands the seller—and, whatever the guy’s trying to do, he crafts his offer that way.’ If you want to change someone’s mind, you should first learn where that person’s mind is.” Then you can build the ‘golden bridge,’ between counterpart and desired result. Murdoch was effective because he made an asset out of people who had a shared motive, maximizing viewership and monetizing publicity.

He recognized the industry’s internal shift of power toward Jerry Jones and new Broncos owner Pat Bowlen and targeted his approach not at the NFL, but the perfectly timed, rising influential decision-makers that had shared purely financial interests (not sentimental ones like previous network owners),  that would ultimately shape the NFL enterprise. Influencers like Jerry Jones and Pat Bowlen signed on. Why? Rupert Murdoch understood the sellers.                                                                                                                                                                           

Achieving the desired result

In negotiating a deal, whether it’s Rupert acquiring Fox’s NFL rights or front line employees pitching product value, you need to consider who you’re really appealing to, the influence/power dynamics, and the timing in the negotiation. 

These strategies relate to not only conglomerate acquisitions, but anyone involved in business negotiation. For example, if you’re a BestBuy customer service rep selling an electronic device during Christmas time, it might be wise to pitch the product not just to the mom or dad, but the whole family, all of  whom influence mom or dad. Understanding internal dynamics in emotional and financial influence as well as the timing of the negotiation, and its long term effects (depending upon the size of the sale or investment) are the keys to acquiring desired results in negotiations. 

According to Sebenius’ HBR article, Fox VP George Krieger contributed on the topic, stating “when he does a deal, Rupert’s thinking about, ‘What’s this going to look like 10 years out, 20 years out? Will this help me build a network?’ The other guys are trying to manage financials for the next quarterly financial report.”

Timing is critical when it comes to the long term goal of the negotiation, as well as the current status of your counterpart (financial, or emotional).

 

The Intelligent Negotiator

As J Oncol Pract stated in an NCBI study with Charles B. Craver, author of The Intelligent Negotiator, “just as a child knows not to ask for a treat in the middle of a quarrel between mom and dad, don't initiate a negotiation during a difficult time for the other party."

"Even when negotiations are underway, correct timing remains important. For example, you shouldn't bring up salary and other compensation details prematurely when seeking a new position. Craver advises, “Wait until you have an offer. If they ask what you expect as salary before stating a figure, the best response is ‘What is your normal amount?” 

Negotiation by its very nature requires compromise, which means there is no such thing as absolute power in negotiations.  Every negotiator exchanges power throughout the negotiation process and there’s always a degree of mutual dependence. However, as the study of Murdoch reveals, recognizing niche strategies like timing and influence can be the deciding factor in achieving the desired result in negotiation.

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