In the online class “Powerful Negotiation For Successful Buying,” I teach my students how to negotiate hard.
But I also point out that hardball negotiation isn’t appropriate in every situation. There is a fine line between negotiating hard and negotiating too hard.
Mario Lemieux has crossed the line.
Late this afternoon, he and his fellow Pittsburgh Penguins co-owner Ron Burkle sent a letter to the local government officials with whom the team has been working on a deal to construct a new arena in Pittsburgh. The scathing letter declared an impasse in their negotiations and criticized (and in my opinion, insulted) the government officials.
For those readers outside of Pittsburgh just tuning in to this issue, the Penguins and state, county, and city officials have been negotiating a deal to secure a brand-spanking new arena in Pittsburgh. The officials had put together a plan to get a massive amount of money together for the team so that its investment in the arena would be minimal.
That wasn’t good enough for Lemieux and the Penguins.
So the officials kept going back into the government coffers to find more money for the team. They found more ways to “sweeten” the deal.
Still not good enough for Lemieux and company.
Then today they play the good-old “Armageddon” negotiation tactic and say that they are going to “aggressively explore relocation” to Kansas City or any other city where they can get a deal that’s a little better.
Being a hockey fan, I was originally on the Penguins’ side.
After today’s letter, I’m not. And here is a totally “stream of consciousness” rant on why I now despise the once iconic Mario Lemieux and his ownership team.
1. Does Mario Need Our Money?
First of all, I have a real problem with Lemieux and company demanding a handout, getting millions handed to them on a silver platter, and then WHINING about not getting enough.
This is government money they are after. The money of the people. And while Mr. Lemieux is living it up in his $2 million mansion in Sewickley (a posh suburb of Pittsburgh), he is trying to make it seem like the tax dollars of the state’s poor should be used to make him richer.
It’s well known that Lemieux wants to sell the team. He wants the best facility arrangement possible for one simple reason – he’ll make MORE money when he sells his shares of the team.
So today’s letter was meant to compel Governor Rendell et al to try to figure out how to take more money from the pockets of our supermarket workers, trash collectors, day care teachers, and other working-class Pennsylvanians to make Mario richer. It was meant to have money earmarked for education and environmental improvements redirected to Mr. Lemieux’s already massive bank account.
I remember seeing a tour of Mario’s home on TV. He has waterfalls in his home and a 3,000 square foot wine cellar that could probably fit the apartment space of dozens of the tax payers that he wants to take from.
There are thousands, if not tens of thousands, of Pennsylvania businesses who can figure out how to have a facility to operate in and be profitable. Why should Mario get a handout when the rest of Pennsylvania’s business owners have the pride to make their businesses successful without resorting to begging and bullying?
Mario’s rich enough. He doesn’t need the whole state to suffer to make him richer.
He’d like you to think it is about keeping the team here for the fans. It’s not. It is about getting more money in his pocket. Period.
2. You Don’t Think Kansas City Has Risk?
The letter talked about the risk of continuing to pursue an agreement on a Pittsburgh arena. As if Kansas City has no risk.
Yeah, Kansas City will likely have good attendance in an NHL team’s first year. But what about after that?
You have historical proof that Pittsburgh will support an NHL team in good times and bad. And, if you’re gonna sell the team, those more reliable revenue projections will result in a much bigger sales figure.
3. Is It Smart To Insult Those That Can Help You?
Despite the government officials’ massive handouts – and continual sweetening of the deal – Mario finds it necessary to insult them in the letter, saying “This risk has been magnified by what we perceive as a lack of collaboration from the public sector in negotiations.” In other words, “Hey, everybody, the people who are representing you aren’t doing anything to help the team stay in Pittsburgh.”
Not only does this insult the government, this insults Pittsburghers.
Let’s face it, this letter was obviously intended to be publicized to put pressure on the elected officials. But we Pittsburghers aren’t dumb enough to believe that Governor Rendell et all haven’t collaborated. They’ve bent over backwards for you, Mario. And we now see what you do when someone bends over in front of you, don’t we?
4. Who Needs It More?
This is now a win-lose negotiation.
If the Penguins win, it’s pretty clear that more public money towards the arena means less money for other interests in Pennsylvania: health care, safe roads, etc.
But what does it mean if the Penguins don’t get their way? Maybe a small reduction in their operating margin.
With this in perspective, should we really be rooting for Lemieux and company?
5. Hardball Negotiation vs. Being A Jerk
I believe in negotiating hard. In business, you gotta work for your best interests.
But when you have a sweet offer and you not ask but ASSAULT your counterpart for more, you can become a real jerk that no one wants to do business with. That approach to negotiating with suppliers is why the US auto industry is on the verge of collapse with suppliers going bankrupt and Ford and GM bleeeeeeeeeeding billions.
And the automakers didn’t even stoop to negotiating through press releases.
Mario was a local icon. Now, he’s just a greedy son-of-a-gun.
In negotiations, there are only so many threats that your counterpart can take before they say “kiss off.” I’ll gladly back any politician who tells Mario to pucker up.
Mario, Pittsburgh is a hard-working town with people who believe in earning their keep. You’re not one of us anymore.
You like Kansas City so much?
Get your greedy behind out of here.
‘Cause even if a miracle keeps the Pens here, we’ll be looking at you through different color glasses. Green ones.
If money is truly the root of all evil, your negotiating behavior has got you a one-way ticket to Hell. I hope you’ll enjoy the 0.0001% of net worth you’ll gain by moving to Kansas City when you’re hanging with Satan in the hereafter.
OK, let me get this back to an educational post.
Buyers: now consider the feelings I’ve just expressed. Are you making your suppliers or third parties feel this way? Are you prepared to be told to “Go to Kansas City?”
But don’t publicly insult the counterparts that you’ll have to work with in the immediate future.
Appear committed to getting the best deal. But avoid coming off as simply being devilishly greedy for the sake of greed.
The Kansas City threat was always there. It motivated implicitly.
Will the new threat be followed by more movement? Probably.
But I believe that the officials have little room left for improvement and the Penguins would have gotten the same result with less vitriolic rhetoric. And they probably wouldn’t have turned off customers like me in the process.
It’s a shame that the owners acted so idiotically at a time when the team itself has done well and become so interesting.
To Your Career,
Charles Dominick, SPSM
Next Level Purchasing, Inc.
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