In the NFL, Roger Goodell’s Dealmaking for Mutual Gains

Because an agent’s incentives are rarely, if ever, perfectly aligned with those of her principal (principal-agent theory), many business negotiators have been burned by agents who put their own interests first. Agents in many fields, for example, have a motivation to close deals quickly – rather than for the best price – and earn quick commissions.

Agents also sometimes face financial or career incentives to play nice when more assertive tactics would be helpful (in the hope of working for the other side, for example) or to focus on price and neglect other issues.

That’s why, in dealmaking and other forms of negotiation, a trustworthy agent can be worth his or her weight in gold. Such agents reap mutual gains from negotiation, rather than sacrificing their principal’s needs for their own.

In the National Football League (NFL), Commissioner Roger Goodell has been one of those agents. Reports Kevin Clark in The Wall Street Journal, Goodell has earned the loyalty of those he represents in negotiations and to the public – the league’s owners – by supporting their positions faithfully, even when those positions place him in the role of the “heavy.” For example, he has taken heat for pushing for public funding for new football stadiums and for arguing that the Washington Redskins’ controversial team name should stand.

“Goodell’s greatest play in his eight years as a commissioner has been to protect the owners in every situation,” writes Clark. In fact, Goodell has “done something significant” for every owner in the NFL, according to  Clark.

That loyalty is now being rewarded. After a videotape was released on September 8 that appeared to show Baltimore Ravens star Ray Rice beating his then-fiancee, Goodell was widely condemned for initially giving Rice a weak penalty – a two-game suspension – and for his claims that, contrary to accusations reported by the Associated Press, no one at the league had seen the tape before it appeared on the internet.

Many observers called for Goodell’s head, but the owners remained united in their support of him. This is in part because they “intensely” distrust the media, including its reporting of the Rice case and also because they believe Goodell to be extremely honesty, writes Clark.

That support could flag if a report by ex-FBI chief Robert Mueller into the NFL’s handling of the Rice case implicates Goodell in unethical behavior. But for now, Goodell’s job appears secure.

The situation suggests several pieces of advice for business negotiators and their agents:

- When working as an agent, take steps to align your financial and other incentives with those of your principal(s). Though you might not earn as much in the short term as you would for more self-interested behavior, you will build strong relationships and a reputation for loyalty that will pay off down the line.

- At the same time, agents must be aware of the temptation to blindly follow their principal down the wrong path. In our efforts to support those we represent, we face the danger of defending unethical and even criminal behavior. Ultimately, your own moral compass must be your guide.

- When working with your agent, be aware of the possibility that a close and trusting relationship could cloud your judgment. Though loyalty is a virtue in the business world, it is important to investigate credible charges and questionable behavior that could harm your reputation.

Source: Harvard Law School: Program on Negotiation