Even if you are not a baseball fan, the start of Spring training in late February signals the eventual end of winter on the North American continent.
And the so-called Off Season now ending featured at least one incident which implicated the world of employment negotiations as much as it did our National Game.
To set the scene for readers who have little or no interest in baseball, the young (25-year-old) generational superstar Juan Soto received a once unimaginable multi-year contract from the New York Mets worth in excess of $700 million. This is a long way from the days when future Hall of Famer Nolan Ryan had to work in the post office after the baseball season in order to make ends meet.
It is also a dream world for the dedicated College and University Presidents and Heads of Independent Schools we are privileged to represent as lawyers (indeed, at some major state universities, the President makes a fraction of the salary paid to the football coach, and the latter is often a state’s highest paid employee).
My interest here is not the stratospheric amount of baseball salaries, but what happened after the Mets signed Soto, and were negotiating over a potential renewal contract for their homegrown slugger, the popular Pete Alonso.
It seems that both Soto and Alonso are “repped” by the same super agent, the notorious Scott Boras, who has the reputation of insisting on, and often getting, outsized paydays for his player clients.
On the other side of this negotiation between Alonso and the Mets was the Mets billionaire owner Steve Cohen. And after the Alonso negotiation had dragged on in private for several months, Cohen took the unusual step of making his displeasure public. He informed Mets fans that Alonso’s return was highly uncertain, and that whereas the Soto negotiation, involving even more money, had gone smoothly, Alonso and his representative (Boras, who was not explicitly named by Cohen) had presented the Mets with nothing except deals “so asymmetrical” in Alonso’s favor that no prudent owner, no matter how deep their pockets, could accept them.
This public “outing” of negotiation difficulties seemed designed to shame Alonso, or at least his agent Boras, as untenably greedy. It was an unusual move, and sent the message that, in a battle between two commercial titans, Cohen was not going to allow himself to be taken advantage of.
As I was writing this, word arrived that the Alonso situation had been resolved, and that in a week or so Alonso will be stretching and taking batting practice with the Mets. He seems to have accepted a short term offer (one year and an option on Alonso’s part for a second year) for a reported total of $54 million. Not exactly a Soto-esque windfall, so the temptation might be to say that Cohen “won” his public negotiation gambit.
But who really knows? Alonso has proven himself an engaging “pitchman”—witness the charming commercial where Alonso, in his bathrobe on his day off, is eating pancakes or donuts with Mr. Met—so remaining in one of the media capitals of America may be worth meaningful income in non-baseball dollars. And geographical satisfaction for any employee has its own value.
In any event, this story does raise some interesting questions about the practice of negotiation which is integral to our work as employment counsel for top academic executives:
1. Although the ultimate compensation packages of non-profit leaders are, however belatedly, disclosed in government filings, is there ever any value in the extraordinary step of breaking the customary confidentiality of contract negotiations? Probably not, but “Never say Never.”
2. How useful and/or important is it to keep the College President or Head of School “above the fray” so that any mis-step in contract negotiations can be blamed on his or her attorney? In my judgment, quite important. Among the things our clients pay for is our ability to “fall on our sword” and take the blame if any aspect of the negotiation (unintentionally or even intentionally) ruffles anyone’s feathers or causes any major upsets.
3. How accurate is the at least two-year-old data from which most paid compensation consultants work to furnish Boards of educational institutions with purportedly comparative data as the basis for figuring out what is an appropriate package of salary and benefits for incoming (or renewal) Presidents or Heads of School? Not very, as we have seen time and again. I often see substantially incorrect—almost always smaller—compensation packages put forth by well-meaning consultants forced to work with such old information; I know they are wrong since we were involved in some of the underlying contracts.
4. How aggressive can or should the attorney for an academic executive be in negotiation? This is a matter of sensitivity and tone. Our desire to achieve a fair and adequate compensation package for our clients does not need to poison the relationship between the executive and the Board of Trustees, who must work together for the good of the School long after the lawyers, recruiters and consultants are out of the picture.
I will leave you with one other baseball story. When asked the secret of his success, the old Yankees pitcher Lefty Gomez responded, “Clean living, and a fast outfield.”
So may it be for all my readers!
Lisa, Terri and I wish you warm and sunnier days ahead.
