The Long Game - How One Negotiator Thought in Decades
WMMM #101 - This week, I share lessons in negotiation.
Jeff Keplar Newsletter June 28, 2025 4 min read
The Customer
The year was 2000.
The New York Mets had fallen just short of reaching the 1999 World Series.
They thought they had a team good enough to make another World Series run.
They needed to free up payroll to invest in a couple of areas to make that happen.
The Salesperson
The year was 1999.
The player was well past his prime when the Los Angeles Dodgers traded him to the Mets.
He would be playing his 15th season of what would be a 16-year career in Major League Baseball.
He was a 6-time All-Star with a career batting average of .279.
A .300 career BA likely gets one into the Hall of Fame.
This guy can hit a baseball.
Does he have anything left in the tank?
The Customer
The Mets wanted to part ways with this player they got from the Dodgers last season.
He only played in 60 games out of 162 in the regular season.
He hit four home runs - his career average was 18.
He had only 18 runs batted in (RBIs).
His batting average was .160.
They had to bench him during the playoffs.
They wanted to cut ties, but they owed him $5.9 million for the 2000 season, as per the contract they inherited when they traded for him.
The Salesperson
The player had signed a 5-year $29M contract in 1996 with the Florida Marlins.
This was the contract the Mets inherited.
He wasn't living paycheck to paycheck.
He had earned over $50M playing professional baseball.
In planning his exit strategy from the Mets, he had learned that Met's ownership was heavily invested with Bernie Madoff.
They were expecting much higher returns on their money than one might expect from a diversified investment portfolio.
The Negotiation
On the surface, the customer had lived up to their end of the deal.
They made the playoffs and came very close to playing in the 1999 World Series.
Not unlike any player in his position, the salesperson had wanted to play on a team contending for the World Series.
The Mets delivered.
He did not.
1999 was the worst performance of his career.
It surely wasn't what the customer was expecting.
The psychological scales should have weighed in the Mets' favor.
The Mets' position was that the player did not perform up to expectations.
Their interest was freeing up payroll for the 2000 season.
The salesperson had done his homework and uncovered the customer's actual needs.
They did not want to pay him the $5.9M in 2000, and they did not want him back on the team.
This meant renegotiating the contract to extend his playing days and minimize the payroll hit for the 2000 season by spreading it over multiple future years was not a viable option.
With the seemingly insignificant knowledge that the Mets were invested with Madoff, the salesperson and his negotiation team chose a purely financial solution.
It's commonly called financial engineering.
With the 10-year Treasury yield at 6% and the prime lending rate at 9.5%, the salesperson chose an 8% rate of return.
The choice of 8% appeared relatively inexpensive for the Mets, given that the prime rate was 9.5%.
An 8% return was significantly higher than the 10-year Treasury, making it an attractive option for the salesperson.
The Proposal
The salesperson's proposal was a deferred compensation agreement:
Release the player
Defer payments for 10 years
Pay $1.19M annually for 25 years, from 2011 through 2035
NPV = $5.9M at 8% interest.
Add the Madoff factor of a promise of low-risk ROI of approximately 1% per month (12% per year), and the salesperson's 8% request looked even more customer-friendly, comparatively.
The customer thought they would earn more on the $5.9M with Madoff than the interest they would pay the salesperson over time.
Happy Bobby Bonilla Day
Although his playing career ended in 2001, Bobby Bonilla received the first of his $1.19 million checks from the New York Mets on July 1, 2011.
He has been receiving them ever since.
He will continue to receive them until 2035, when he will be 72 years old.
He got what he wanted by giving the Mets what they wanted.
The Mets used the $5.9M in freed-up payroll to sign a starting pitcher and an outfielder they received in a trade with the Houston Astros.
Mike Hampton became the ace of the Mets pitching staff in 2000, delivering a 15-10 win/loss record and winning the National League Championship Series MVP award.
Derek Bell slugged 18 home runs and batted a respectable .266 playing outfield.
The Mets advanced to the 2000 World Series, where they lost to the New York Yankees.
They got what they wanted.
The Irony
Mike Hampton left the Mets after the 2000 season.
Bernie Madoff's returns were a Ponzi scheme - fabricated and unsustainable.
The deferred compensation agreement allowed Bonilla to reduce his income tax liability, thereby increasing the deal's value to him.
The 8% guaranteed interest rate has continued to look better with time.
The 10-year Treasury yields dipped from 6% to as low as 1.8% in 2016 and have never been above 4.1% in the first 15 years of Bonilla's 25-year deal.
Lessons Learned
1) In negotiations, focus on interests, not positions.
2) It's not about being right—it's about being effective.
3) Control the framing - frame proposals in terms of value gained, risk avoided, or future benefit.
Thank you for reading,
Jeff
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