Case Study Analysis Part A ("A Power Play For Howard")

1704 words - 7 pages

Below is an observation of negotiations in the National Basketball League, concerning the Washington Bullets' star player Juwan Howard, the Washington Bullets' General Manager, and the Miami Heat's General Manager in a "bidding war" for Juwan Howard's employment with the NBA (Brubaker, Asher, Solomon, and Adande, n.d.). The observation includes a brief summary and analysis of the negotiations between Howard and the bidding teams. The analysis also includes an evaluation of the tangible and intangible benefits, costs, and risks associated with negotiations with Howard as a free agent, given the perspective of all parties involved.The Case of Juwan HowardJuwan Howard, a budding star in the National Basketball Association (NBA), became the focus of a complex struggle of team allegiances, contract negotiations, and player bargaining between two teams in the NBA. The Washington Bullets, who drafted Howard in 1994, offered Howard an initial salary (11 years, $37.5 million), with an option to become a free agent after the second year of the deal. According to Howard, the deal represented an amount that was less than his value. He signed the contract reluctantly. After two seasons, his play on the court forced the NBA to take notice of Howard as a viable commodity in the league. In addition to his play on the court, Howard was active in the Washington D.C. community, and he existed as a fan favorite. In the summer of 1996, Howard experienced his first case of players recruiting him from other teams. This made Howard feel good about his play and his standing as an NBA talent.David Faulk, Howard's agent, began to negotiate Howard's free agent deal. He essentially began to 'shop' Howard to the league in order to garner offers from other teams. Early in the summer of 1996, Faulk deliberately asserted to a Washington Post reporter that he fully expected Howard to sign a deal well over $100 million in cash and incentives. When the Washington Bullets' General Manager Wes Unseld finally sat down to make the offer; it was a 7 year, $78.4 million dollar deal. Howard was disappointed with the deal, since Unseld and the Bullets had asserted that they would do whatever they could do to keep Juwan Howard on the team. At this point in negotiations, another team showed interest in signing Howard. Pat Riley and the Miami Heat were busy trying to create space in the team budget so that they would have enough money to sign Howard to the Heat roster. Riley had to first solidify The Heat's contract with their top player, Alonzo Mourning. Riley communicated to Mourning that he would get Mourning a deal that would make him the highest-ranked player on the Miami Heat roster.Unfortunately, Riley did not have permission to negotiate deals with players without officially notifying the NBA; this according to the league's Collective Bargaining Agreement (CBA). In the meantime, Riley offered Howard $91 million, plus $3.5 million in bonuses. The Bullets' executives countered the offer...

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