Pacquiao/Mayweather : The Concept of Negotiating & Dealing with a Non-Serious “Buyer”
By Steve Lewis: It is a topic in boxing that just won’t go away: the long drawn-out pugilistic fantasy known as the Floyd Mayweather/Manny Pacquiao superfight. And tied to that topic is its own sub-topic: the failed negotiations.
We keep hearing it asked: Who’s to blame? Who is ducking? Who is putting up roadblocks? Is it just posturing? Who said what? To whom? Did it really take place at all?
Boxing writer Paul Magno of the Boxing Tribune calls on mainstream media to take more responsibility in reporting the facts, rather than trying to cater for pecuniary interests to partisan fans who only hear “what they want to hear.” Apparently, Magno also feels that the truth is further drowned out by the more vocal and fanatical Pacquiao contingency, the very same group whom the mainstream (and non-mainstream) media constantly cater to.
Magno then opines that most Mayweather supporters hold Pacquaio responsible for the failed negotiations (no more surprising than Pacquiao fans thinking Mayweather is responsible), as do most “hardcore fans.” Magno takes an issue that this particular side does not get highlighted much by the media, and instead, only tells “one side of the story.”
However, similar to what Magno concludes, there are plenty out there who attribute the failed negotiations to both sides. But Magno points out that it is Pacquiao who has walked away from negotiations on at least two occasions.
Based on what I have read from various writers (usually bloggers), their concept of negotiations differ, ranging from rudimentary to outlandish. I am, by no means, an expert in negotiating. But as someone who had through sit through an entire year of 1L Contracts, listening to lecture upon lecture about offers, counter-offers, consideration, and acceptance, mutual assent, performance, obligations, discharge, breach, remedy, and even the dreaded UCC (American lawyers would know what I am rambling about), I can say that I have some basic (and I stress “basic”) understanding of the concept of negotiations.
To put it simply: you have two sides who want to get as best of a deal as they can get. For purposes of our illustration, let us call one party the “buyer” and the other one the “seller.” The buyer will want to pay as little as possible, and the seller will want to sell for as much as possible. The objective is finding that middle ground that would be satisfactory to both parties. Remembering this objective is key.
So how do these two parties reach a middle ground? Well, the seller has to lower his price, and the buyer has to raise his purchase offer. In other words, both sides have to try to move towards the MIDDLE. That is how you come closer to an agreeable compromise.
Now let’s take a look at the Pacquiao/Mayweather negotiations. Going back to our illustration, let us designate Mayweather as the “buyer” (as he is the one supposedly offering Pacquaio a $40M guarantee) and Pacquiao as the “seller.” These two sides will obviously start out on opposite sides of the spectrum. Now, the question is, “Have they been trying to move towards the MIDDLE?”
Well, the first issue (and at the time, the only issue, it seemed) that served as a roadblock was the drug testing policy. The parties have supposedly agreed on everything else, except for this sticky blood testing issue. Pacquaio wanted the standard NSAC drug testing that everyone else in the state of Nevada has ever undergone at that time, and Mayweather wanted Olympic-style testing.
To their credit, both sides tried to move towards the middle, even if it were only by a little bit. A sign of good faith dealing is that you keep moving towards the middle. Pacquiao agreed to Olympic-style testing, but with a 24-day cut-off. Mayweather countered with 14 days.
Still, both sides could not agree. But that’s not unusual. One cannot expect a multi-million dollar deal to be done in one sitting with no counter-offers.
So after much hullabaloo over a difference of 10 days, Pacquiao relented and moved further towards the middle by agreeing to Mayweather’s 14-day proposal. Now, here is where we see a shift, in that instead of inching closer towards the middle, Mayweather heads the other way. He goes the opposite. He says no cut-offs at all! No more 14 day cut-off, which was previously acceptable, but now is not. Reminder: the objective is to inch towards the middle until you reach a common ground.
Again, the seller needs to keep coming down, and the buyer needs to keep going up, until they reach a mutually agreeable point. But here, as the seller (Pacquiao) kept lowering his price, the buyer (Mayweather) kept decreasing his purchase offer. In sales parlance, Mayweather is what would be called a non-serious buyer. He is a buyer who isn’t really serious about buying. A serious buyer would either increase his offer or accept the terms of the seller, not lower his offer even more.
If you were selling me your Rolex watch for $50, and I offer to buy it instead for $30, and you say, “Well, at least give me $40 for it,” and I tell you that I do not want to spend more than $30 for a used watch, what would your reaction be if you relented and decided to sell it for $30 and I say, “Nah, I’ll only buy it for $10?” You would say I wasn’t really serious about buying your watch for $30. I would say that I was not a serious buyer, period.
Now, I know the usual counter-arguments: “Well, Mayweather already withdrew the offer. Pacquiao didn’t take it, so it’s too late.”
Yes, yes, yes. In contract law, that is what we call a rejection of a counter-offer. A rejection of an offer (or a counter-offer) ends the transaction. A party cannot give an acceptance to that which has already been withdrawn. I get that.
What you do then when INITIAL negotiations fail is try to begin re-negotiations. And where would you start? Well, the typical starting point is where you left off and go from there.
So Pacquiao started where he left off: the 14-day cut-off. Mayweather says no can do. So Pacquiao moves closer towards the middle (remember the objective) and finally agrees to Mayweather’s version of Olympic-style blood testing, which the Mayweathers kept chanting as a mantra previously, “Take the test! Take the test! If you take the test, then we have a fight.”
So what does Mayweather do? Does he finally agree to the terms he was previously insisting on? Does he “move towards the middle?” Nope. He goes the opposite way again.
Now, with the drug test supposedly being a non-issue, it is now how the pie is divided. Pacquiao wants 50/50 (as most people assumed it would have to be), but Mayweather only wants to pay him $40M with NO percentage from the pay-per-view revenues, estimated to be about $150M!
Not only did Mayweather inch the opposite way instead of inching towards the middle, he sprinted the other way!
I hear the counter-arguments again: “But Pacquiao already said before that he would be willing to take a smaller share to fight Mayweather!”
First, what a person thinks out loud should be taken with a grain of salt. And even if Pacquiao was sincere about that statement, most reasonable people understood “taking a smaller share” to mean maybe a 49/51 split, just so that the other party can say they have the lion’s share. I seriously do not think he contemplated a flat rate of $40M and no PPV revenues at all. Anyone who thinks that a megabout between the two top fighters in the world should have one fighter getting all of the $150M PPV pie and none for the other is out of their mind. To justify that would be intellectually dishonest.
I hear it again: “Why should Mayweather split 50/50 with a guy who does less pay-per-view sales, has 3 losses, a couple of draws, and has been knocked out before? Floyd is undefeated!”
I am not going to venture into an analysis of comparative pay-per-view sales. We can argue all day about who really carried a pay-per-view event. All I can say is this: people will pay to see Mayweather if he is in a compelling match. People will pay to see Pacquiao fight anybody, including your Aunt Helen. People are already speculating as to who will sell more PPVs this May and June: Mayweather/Cotto or Pacquiao/Bradley? That would not be an apples to apples comparison.
Let’s put it this way: Pacquiao/Josh Clottey in Cowboy Stadium and Mayweather/Clottey in Cowboy Stadium. Who do you think would sell more? Do you think Mayweather can fill up Cowboy Stadium against an obscure fighter like Clottey, the same way that Pacquiao did? I have my doubts. That would be more of an apples-to-apples comparison.
Next, this “I’m entitled to more because I’m undefeated and he has losses” rationale carries little weight in these types of negotiations. What matters is: What do you bring to the table? Few would argue about Pacquiao’s ability to sell tickets and PPVs.
Records are irrelevant here, especially if these are records from years ago. As ESPN personality Colin Cowherd always says, “Stop living in the ‘was,’ and start living in the ‘now.’” And money is not dictated by records anyway. Otherwise, Paul Spadafora would earn more than Sergio Martinez, because Spadafora is undefeated and Martinez has losses. Wouldn’t make sense now, would it?
Both fighters need each other to generate the kind of money they think this fight will generate. It’s a symbiotic relationship. Thus, it is not unreasonable to split everything down the line. Asking Pacquiao to take $40M while everything else goes to Mayweather is. So again, both need to start working towards the middle, which only Pacquiao has been doing. Constantly going the opposite way only says one thing to me:
Mayweather is not a serious buyer.
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