When I took Negotiation in college I gained something of a reputation for being a hardened negotiator. The class had major projects where several sets of teams would negotiate against each other to work out a simulated contract. I was the lead for my team, and the team we negotiated against (which included NFL All-Pro Deangelo Williams - name drop!) was so determined not to lose to me, that they refused to accept a deal from my team.  We were the only teams who did not reach an agreement.  When the deal we proposed was compared to all of the accepted agreements of the other teams, my team offered the most financially beneficial contract.  My reputation made the other team assume they would lose with any deal from my team.  Despite my reputation, what I realized is that the best contract is a contract that is beneficial to both sides of an agreement.      

I reflect on that experience looking at the story about the negotiation between the Memphis Grizzlies and Xavier Henry.  The Grizzlies are in the right in this situation, but unfortunately, the club’s reputation and prior practices are making the organization appear cheap and unreasonable.  If a franchise like the San Antonio Spurs offered their first round draft picks the guaranteed amount based on draft slot and made the rest of the allowed 20% premium obtainable through reasonable benchmarks, the agent and the player would look like the villains in the situation.  Since the manic-depressive Memphis Grizzlies are drawing a line in the sand on this truly minor issue, the local fans and the national media is flustered by the latest sign of how the Grizzlies are trying to be save another dollar. The Grizzlies will be extremely close to the luxury tax threshold in the 2010-11 season and asking for financial flexibility with the newest guaranteed contracts is reasonable. 

Arm Tellem is the bad guy right now. Tellem is longing for the days of the Grizzlies organization being run by good friend Jerry West who rubber stamped big contracts for Tellem clients Pau Gasol and Mike Miller. In fact, the legend around town is that the Grizzlies were adamant about not giving Pau Gasol a maximum contract, and as soon as Gasol fired his agent and hired the Logo’s buddy, the Grizzlies quickly justified giving Gasol a 6 year, $86 million deal. Tellem’s public relations campaign over a minimum of $600,000 (with Tellem’s agent fee being $18,000) is an absolute joke. If reports are true that the incentives are tied to Henry’s minutes, playing in the rookie game, and being an all-rookie player; it is unreasonable for any NBA fan to side with the player.  Especially those critical of the long term guaranteed deals the NBA. The Grizzlies are hog-tied this season because of the guaranteed contract of Marko Jaric and the approximately $7 million the deal counts against the Grizzlies salary cap even though the contract was bought-out last season. Tellem speaks of the 20% premium as if it just given to the first round picks; if that was the case, why is the 20% premium even written into the Collective Bargaining Agreement? Unfortunately, details of rookie deals are not usually published, and I really doubt that every first round draft pick gets the premium indiscriminately.   

The Grizzlies have proven to be the champions of hustling a dollar.  Whether playing money launderer for hire with salary cap space, haggling coach Lionel Hollins on a new contract after a season with significant improvement, or being innovators in having the minimum 13 players on the roster, the Grizzlies will find ways to improve the bottom-line.  Memphis is a small market and the Grizzlies have not created loyalty with the locals and corporate community to unconditionally succeed at the box office.  Ten seasons in Memphis has been scarred with PR blunders and constant shots in the foot.  Even if the Grizzlies sold out FedExForum for the season, the team still has to be efficient with its payroll.  When the Grizzlies make the right decisions when it comes to payroll, the organization does something like fumbling the Rudy Gay extension because of an unwillingness to budge in negotiations leading to a $24 million correction when Gay has to be re-signed as a free agent in a seller’s market. So when the Grizzlies organization takes a stand on making the 20% rookie deal premium an actual bonus, it’s like Jose Canseco calling out the players who were using steroids!

Since rookies do not have to report to the team until late September, the Grizzlies have over a month to work things out with Xavier Henry (and Greivis Vasquez).  I agree that the 20% premium should be tied to performance despite what has been done in the past. Antoine Walker once got a maximum contract. “The Presence” Hasheem Thabeet was drafted with the second pick when Tyreke Evans played at the University of Memphis. Rookie deals should have a way to award players for good performance.  The Grizzlies had the worst bench in the NBA last year, and Xavier Henry will have plenty of opportunities to earn his bonus because he will be the only shooter on a bench with Tony Allen and Sam Young. 

The Memphis Grizzlies need to stand their ground in this issue, but hopefully are willing to be flexible in negotiations of the incentives for Henry to earn the extra money.  Maybe fans and media will judge this stand-off by its merit instead of the Grizzlies’ reputation and the fairly insignificant amount of money. In my Negotiation class simulation, my team was a movie studio and the other team was an agent for a movie star.  Our offer satisfied all of the star’s requests, but the other team assumed something was wrong with the offer because it came from me. Unfortunately, the Grizzlies have the same problem.  What is reasonable is not what a powerful agent like Arm Tellem accepts, and observers should realize what the Grizzlies are offering is not as outrageous as the spin indicates.  The Grizzlies are not screwing over Xavier Henry like the New Orleans Saints got over on Ricky Williams when Master P was this agent.  The message is strong and despite the Grizzlies being the messenger. The rest of the NBA will quickly follow suit in treating the 20% rookie premium as a bonus. The unfortunate thing is the Grizzlies are often innovators in what’s responsible, but Grizzlies innovations are ridiculous until more credible organizations adapt them and make them vogue.