Problem:
Before the beginning of the 2011 season, Albert and the St. Louis Cardinals agreed to a contract deadline. Albert did not want contract negotiations to be a distraction for him during the season and asked that all discussions and offers wait until the end of the season. As asked, we respected Mr. Pujols wishes.
Goals:
Our goal was to keep Albert in St. Louis. Over the past ten years, he has become an icon to the great city. He is not only the best player in baseball, and on his way to having a Hall of Fame career, but an iconic figure in sports. While in negotiation, we wanted to keep in mind our common goals. Albert and the Cardinals wanted to play great baseball. We wanted them to play great baseball and it was our job to find the best people to do that. We also wanted to negotiate terms that would protect our organization. Going into negotiation, the Cardinals’ goal was to pay a fair price for a player of Albert’s age, ability, and achievements. Knowing his statistics, we expected a hard bargain.
Leverage:
Pujols received $16 million in 2011. Cardinal management acknowledged he was in line for a raise from that, but the question was how much and for how long. They knew the risk that another team could offer a higher bid that they could not match, but hoped the open market would not be as welcoming as Albert and his agent, Dan Lozano, had hoped.
The Cardinals did not have a lot of leverage in this negotiation. They were one of many teams that sought after the great player and the one with the right price and package was going to win. However, they hoped that Albert’s ties to the area would be enough to make up for any of the money they could bring to the table.
Norms:
The 31 year old baseball player had 30 home runs, driven in 100 runs, scored 100 runs, and batted .300 for eleven straight years. These stats are great, but our question became can they continue? We had to keep in mind averages and norms for professional baseball players. The average age for a professional baseball player is 27 years old. Noting that Albert was already older than this, the length of his contract came into question. Alex Rodriguez, the highest paid player in baseball, signed a ten-year contract with the Yankees at the age of 32, and 3 years later was showing signs of significant decline. The Cardinals had to think like a business and base their offers on past experiences and norms. This let them to not bet on Pujols remaining a significant contributor through the next decade.
Reasons to Settle:
Although Albert Pujols is one of the greatest players of baseball, it takes more than one player to play the game. Baseball is a team sport. There were other very valuable players that needed more money and that were not requesting as high demands as Albert. The Cardinals felt they would make the best offer they could without taking on too much risk, if that did not work out, they would move on to other up and coming talent.
Third Party:
There was a third party in this negotiation, Albert’s agent. His interests were not for any particular team, but for Albert to get the most money. He negotiated on Albert’s behalf, which took away some of our leverage. We wanted to remind Albert the benefits of staying with the Cardinals and his ties to the St. Louis area.
Outcome:
In the end, the Cardinal’s organization felt that the best offer they could propose to Albert was a nine year contract around $200 million. That would have made him the fourth-highest paid first baseman in the league. This offer was not quite the best and Albert signed with for $254 million, 10-year contract with the Los Angeles Angels, making him the highest paid first baseman.