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Photo Credit: © Tom Szczerbowski-USA TODAY Sports

The Darren Ferris Playbook is Evolving

On this, the first day of school, I’d like to welcome each and every one of you fine students back from what I hope was a wonderful and fulfilling summer break.

It sure wasn’t a break for me, though. I mean, yeah, nothing actually got done. But you know what they say! Money (and Twitter) never sleeps.

Anyway…

Hello! My name is Professor Darren Ferris, PhD. and welcome to the first lecture for the course “Negotiating 201: Updating the Playbook”. It’s no doubt going to be a fun semester. For those of you who have yet to take this course’s prerequisite, “Negotiating 101: An Underwhelming RFA Extension in Four Easy Steps”, all materials can be found here.

With the pleasantries out of the way, let’s get started.

Course Review

Obviously, I’m sure every single person in this class today has become familiar with my trusted — nay, patented — playbook for handling an RFA client’s post-ELC contract negotiation. Yes? If not, I’ll run through it real quick:

Step One: Roughly one year ahead of time, publicly declare that your client is in “no rush” to negotiate an extension due to a “respect” of “the process”.

Step Two: Carry contract talks DEEP into the summer while simultaneously launching a Twitter campaign meant to pit your client’s fanbase against his organization  — typically achieved by feeding “scoops” to one or two trusted insiders about how they are low-balling him — all in the hopes of getting them to cave.

Step Three: When step two has inevitably failed by around late-August/early-September, feed those same trusted insiders a new batch of reports, this time on how your client may head overseas — preferably to Switzerland, it’s my favourite — for the first few weeks of the season in the absence of a contract.

Step Four: Finally, as the regular season nears its kick-off, cave and settle on an ultimately underwhelming figure.

Works every time!

But, what if I told you the playbook has more than just four steps? What if I told you that those steps don’t have to operate solely in the realm of your given sport, either? What if, and this is important, what if I told you that those steps don’t even have to make sense?

Buckle up, kids. We’re about to wade into some new territory.

Weaknesses Are Your Friend

Let’s use my client, Mitch Marner, as our case study.

All summer long I’ve been following my blueprint with religious gumption to no avail. Toronto Maple Leafs management just will not budge on Mitch. For the life of me, I cannot understand why. I’ve been reasonable! But, no, they just laughed me out of the room when I propose the whole “making our own comparable” approach that dawned on me while watching The Nanny re-runs on Nick at Nite.

I thought they’d be a smidge more receptive, at least.

So, what did I do? Well, I waited. I bided my time. And, when the unofficial media offseason reached its end and reporters returned to the airwaves, I hit ’em where it hurts.

Kawhi Leonard.

Sure, the Toronto Raptors just won their first championship in franchise history, capturing the hearts of an entire nation in the process while giving birth to a whole new generation of Canadian basketball, but isn’t it kind of tainted? I mean, Kawhi left. He’s gone. The guy received the key to the city one day and, like a week later, spurned the organization that had just moved mountains rehabilitating his career.

That’s got to hurt, right? Of course, it does! So, use it. 

You’ve already exhausted each available avenue: offer sheets, the RFA interview period, European league defection, trade, everything. And what do you have to show for it? Nothing. Literally nothing. In fact, it’s actually had the opposite effect. The public has begun to turn sour on you. They’re fed up and can see right through your tactics.

Frankly, that’s okay. It happens. I anticipated this. I am very smart.

So, faced with an image crisis and a clock that is ticking faster down to training camp, how do you find new and engaging ways to court public favour? That’s right! You remind the fanbase of their most recent breakup, subliminally linking your client to the one who broke just their hearts and, in the process, planting a seed of doubt deep into the crevices of their pride.

“How’s it going to look when TWO superstars leave your city in the same summer? And one was a hometown boy? Jesus, you’ll be no better than Edmonton!” 

Suddenly, all these fans will care about is saving face. Cap figures won’t matter. $11 million per? Who cares! As long as Local Boy Mitch™ can hold a pre-season press conference in which he spends an hour waxing poetic about always wanting to be a Maple Leaf and how he never, not for even ONE SINGLE SECOND, thought of leaving the good city of Toronto, these folks can stomach a fourth line made of damp dryer lint and stale oatmeal that Marner’s cap figure will handcuff them to.

Don’t stop there, though.

Strike While the Iron’s Hot

Just because you’ve successfully gained dominance over the collective psyche of an entire fanbase with your big, sexy brain doesn’t mean your work is done. On the contrary, in fact, you need to act fast. Setting up your kill shot needs to happen right away.

See, when madness hits its peak, that’s when you lay your cards on the table.

“Oh, you don’t want us to leave? Great! Here are our final demands”

The fans? They won’t look at it that way, though. To them, this three-year deal will seem like you’re doing management a huge favour. I mean, you ARE sacrificing term, after all. Players love term. They can’t get enough of it. And in giving up a few years today, the perception will be that you’re putting yourself on the line to ensure that this team’s golden boy is ready when training camp opens, thereby sheltering them from the inevitable PR hit his absence would dictate.

No distractions, no speculation, just hockey.

Suckers.

Not only will you have successfully re-branded the most lucrative bridge deal in NHL history as a “huge favour”, but that three-year term — the one you so graciously conceded, by the way — will effectively march your client right to the precipice of free agency at the end of the 2021-22 season.

Why is that date special? Well, it just so happens to be the precise moment when the NHL’s U.S. TV rights deal expires.

What does a new TV deal mean? I’ll tell you, class. A new TV deal means a higher salary cap, which means a bigger payday for your client, which means a new yacht for Darren you, my valued student.

What is your client’s team gonna do? Call your bluff? Wait you out? Yeah, okay. It’s not like their management group has a recent track record of playing hardball with RFAs whose aggressive negotiation tactics were reportedly spearheaded by a notoriously-stubborn agent and notably-involved father.

You make your own comparable, after all. Who’s laughing now?

Jeez, was that the bell? This university apparently has a bell. In any event, that’s all the time we have for today. You’ll have to wait until next week for the final step.

Oh, and a reminder: textbooks — written by me, of course — can be purchased at the campus book store for $11,635,000.

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  • CloudLion

    Salutations Writers, Editor in Chief, and Fans!

    I think it’s time we start asking ourselves some serious questions:

    1) Is Kyle Dubas old enough and mean enough to manage an NHL hockey team? Has Kyle, Mr. Dubas, ever read a fortune from a cookie that stated: “Good people can finish last. Great people get up and work harder.” I’m paraphrasing that to be social-politically correct.

    2) Has Kyle, a.k.a. Mr. Dubas, ever played a game of poker and not smiled when he’s bluffing? Can he bluff a poker hand?

    3) Can Kyle, a.k.a. Mr. Dubas, draw a line in the sand and… not draw two or three more we can’t cross after the first one is crossed?

    4) Does Mitch Marner really want to win a Stanley Cup before he turns 26?

    5) Does Mitch Marner really want to win a Stanley Cup playing in Toronto?

    6) How much damage is this whole Mitch Marner fiasco going to cause to Kyle, a.k.a Mr. Dubas, the Toronto Maple Leafs organization’s immediate future, the NHL, the NHLPA, and the fan base paying for hockey as a form of entertainment? Professional hockey is still just a form of entertainment.

    7) Does Kyle, a.k.a. Mr. Dubas, fully grasp basic generally accepted accounting principles?

    8) Does Mitch Marner have a basic clue what GAAP principles are and how the basic principles of GAAP theory apply to everything that builds a winning business from the ground up? Dollars, American and Canadian, build the leading and supporting cast for great entertainment. Great teams who entertain. Great teams who win in business beyond just entertainment.

    9) Do both sides in this public fiasco really grasp the true stakes in this game as those stakes are converted to dollars and cents in Canadian and American currency over the next 30 years and beyond?

    10) Beyond the self-interests enjoyed by the Toronto Maple Leafs management team, player agents, and players; are there other critical stakeholders in the periphery who stand to gain or lose as a result of the relationship those three enjoy today?

    11) Do any of the direct parties involved in this negotiation understand how other winning teams have used basic GAAP theory to win?

  • CloudLion

    Sadly there are huge ramifications shadowing over this entire negotiation process. The external hockey stakeholders may end up being the biggest financial losers right off the bat. The state holders who will stand to loose in ways those three parties don’t seem to fully grasp, understand, and accept. Those stakeholders include the memorabilia partners, retail partners direct and indirect, the media producers, the tercentenary affiliates who pay to use NHL and NHPLA access rights to sell their products. That’s goodwill for measurable financial gain. Then there is the fan base who pay dollars to associate their expectations, their dreams, to share in the vision of a winning brand. The NHL over markets winners too often. Players past, present, and future, have enjoyed taking fan goodwill to the bank. Ask Bobby Ore and Wayne Gretzky. What do they get paid now to associate their names with other organizations, products, interests, and non-NHL affiliates free from having to pay past agents? Mitch Marner’s agent is robbing him blind. Darren Ferris is robbing Mitch and Darren will never see a dime of what he’s taking away from Mitch’s future value. I don’t know if Darren Ferris honestly gives a second thought to what Mitch Marner makes with his life after Mitch is no longer paying him. I don’t think Darren Ferris really understands the idea of extended stakeholders beyond how that translates into dollars deposited into his personal bank account; today! Darren is selfish and doesn’t want to share strategic long-term GAAP thinking with Mitch Marner. The damage Darren has done to the Mitch Marner brand is serious enough now. Successful NHL teams, agents, and individual players use GAAP every year. Sometimes I wonder if the NHLPA fully understands the stakeholder relationship it needs to protect with the honest help of the NHL at times in the face of third party interests and non tangible stakeholder residual spin offs. What NHL teams demonstrate good GAAP practices?

    The Boston Bruins organization has translated GAAP principles into good management theory and produced winning teams. The Bruin’s organization has done so almost consistently in recent history even after signing off on bad mid to long term contracts. The Pittsburg Penguins use to know how. You can argue the San Hose Sharks don’t know how to translate GAAP principles into a winning on ice product. How much has San Hose over-spent on star power in the last fifteen years? You can argue that Chicago won using GAAP and then they lost by forgetting GAAP. We can argue that Harold Ballard was a GAAP practitioner for all the worst reasons. Harold Ballard’s curse was: “You don’t need to over feed a cow that produces limitless amounts of milk. You just give it what it basically needs and milk it!” I doubt Mr. Ballard cared about the Leafs over the long-term. Ballard cared about the basic year end balance sheets. That was a winner for him. That’s overly practical GAAP. Ballard milked the Toronto Maple Leafs brand for every litre of milk it would give for the cheapest price invested. Ballard milked positive brand goodwill in the worst way.

    An important contentious concept in GAAP is: Goodwill. How do you translate goodwill into a tangible return value on a balance sheet and in realistic cash-flow projections? That’s a school of debate and material expectation challenge to realization theory all unto itself. Every time you or I buy any piece of authorized NHL paraphernalia we are translating goodwill into a measurable financial gain for all NHL parties involved. Goodwill is the foundation force driving advertising, future value of an investment into an intangible projected to become a realized financial tangible. It can be a positive and negative force for cash-flow adjustments. Goodwill is a driving positive and negative force for present and future budgeting based upon past goodwill tangible ratio adjustments: positive and or negative. If you spent 2 dollars making a product and 1 dollar on advertising and then received 400 dollars as a result of the investments: how much of that return is quantifiable goodwill? If you project to spend 2 dollars on advertising and 1 dollar on making a product expecting to make 72.00 and only make 12.00: that’s a balance sheet loss. Goodwill is an intangible that can become tangible. Goodwill allows you to make something from almost nothing in theory. You have to pay a price to win goodwill. The NHL is entertainment and the result of that entertainment is winning fan goodwill. Every time an NHL fan spends a dollar on any NHL product that produces tangibly measurable goodwill. The NHL is entertainment and the players are the actors.

  • CloudLion

    Once the goodwill of fans is lost so is their predilection to invest a dollar to express their goodwill. That expression lost then becomes a lost realizable financial tangible. You lost one fan’s dollar. That has a huge multiplier effect. Everyone loses. Everyone involved in any process that involves trying to predict a financial out come based upon investing in the NHL loses. Just ask Rogers Communications how their five year practical financial investments turned out. Rogers invested into the idea to gain access to realize a projected captured value thanks to fan goodwill expected results. Clearly Rogers lost a serious amount of money on that gamble and investment. Rogers made a huge financial investment in something that is intangible. I believe Rogers made that investment to turn a negative brand image intangible into a tangible positive value for their investment. Goodwill can be a negative and a positive. I believe that Rogers expected that it could turn it’s negative brand associated goodwill into a positive by investing in professional sports through entertainment content control. The Rogers choice to invest into the NHL, and it’s associated brands, looks like it was a mistake. Bell Media is experiencing the same negative swings in some of it’s investments. I’d bet Bell is laughing it’s way back to a bank now. Why? Bell lost the bidding war to Rogers in the competition to enjoy strategic control over first right access to NHL content. That investment by Rogers was suppose to translate into a future “real” value. The idea Rogers assumed it bought was perception in the idea of future “value.” Rogers bought a controlling interest in NHL first choice privileges. It’s complicated. I’m trying to over simplify everything in this mess. The challenge is to do that responsibly. Or to at least look like I’m paying responsible homage during the process too not over simplifying the complexity. How does all that have anything to do with Mitch Marner? NHL players are the actors. Every star actor is his, her, or it’s own brand.

    Mitch Marner is sacrificing a huge amount of future tangible goodwill in this mess. Mitch might believe his agent is honestly looking out for his best immediate interests. The agent is looking out for number one first. I don’t believe for a moment that Mitch Marner understands how much money he’s pissing away in this process ten years from now. I’ve met too many people who’ve claimed to play ice hockey with Mitch Marner. Summer ball hockey with Mitch Marner. I’ve listened to stories about how horrible Mitch Marner is when it comes to softball. I don’t know Mitch Marner so I can’t ask him to play catch. I wouldn’t dare put on a pair of skates now. I’m too old, fat, and ugly, for that adventure now. Too many of those people are now calling Mitch: “Billy junior!”

    One thing I can testify to honestly: people I’ve met who bragged about meeting, playing sports with, and or brag of being in common association with Mitch Marner in the past are changing their opinions regarding Mitch. Mitch Marner’s name as an intangible goodwill value is changing from a positive to a negative. The same thing happened to William Nylander’s poster boy Vogue image as the Leafs future. Too many Billy Nylander past fans now associate his name with greed. Self serving greed. Billy is no longer an adopted Canadian in too many fan’s eyes. Seriously… in too many of Billy’s ex-fan’s eyes. The same thing is happening to the Mitch Marner goodwill brand. That’s the image the individual brand. Mitch Marner’s goodwill image. To change this image; Mitch Marner might have to score a game seven over-time goal thus winning a Stanley Cup. Mitch might have to put up 19 points in that year’s NHL play offs for…. the Vancouver Canucks, Edmonton Oilers, Winnipeg Jets, Calgary Flames, Montreal Canadians, or the Toronto Maple Leafs. Maybe Mitch does that at 34 with Austin Matthews playing for the Arizona Coyotes? The Mitch Marner brand will be 100 times more valuable a multiplier effect financially if he wins a Stanley Cup playing for Toronto. With or without Austin Matthews help.

    For every 750 000 dollars Mitch Marner extorts from the Toronto Maple Leafs organization it is 750 000 dollars less the Toronto Maple Leafs have to spend on the best supporting cast that the organization can pay for to help make Mitch Marner become a Canadian super-hero and “the” Toronto professional sports icon for 40 or more years from now. For Mitch… if he honestly sat down and thought about his future dollar value, a future revenue he doesn’t have to share with his agent, well I would assume if he understood: GAAP; he’d fully understand his real: “Future Value!” His honest present value in a practical team and organization perspective.

    • CloudLion

      …. The stake holders who will stand to loose in ways those three parties don’t seem to fully grasp, understand, and accept. Those stakeholders include the memorabilia partners, retail partners direct and indirect, the media producers, the tertiary affiliates who pay to use NHL and NHPLA access rights to sell their products. That’s goodwill for measurable financial gain. …

      Point of order:

      Just don’t trust Grammarly! Especially when posting while drinking beer on your day off.

      It would be nice to be able to edit comments after posting.