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On trade negotiations and positions of power.

2/15/09
by: Scott
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Now that the Raptors-Heat trade has marinated in my brain juices for a couple of days, I realize that it's impossible to not come to the conclusion that Pat Riley and the Miami Heat had the upper hand.

I know I'm not saying anything revolutionary or controversial with that statement — I'm essentially echoing what 99 percent of the commentators, bloggers and message board posters have been saying since Friday. But if you're like me, you might have been having a hard time figuring out why Raptors' President/GM Bryan Colangelo agreed to this trade.

That's what I've been pondering for the past 48 hours, and I think I now understand how this came to be. Before we get to that, however, I should probably make my case as to why the Heat definitively came out better in this deal.

The magic of this deal for Miami is that Jermaine O'Neal and Jamario Moon don't even have to play a single game for the Heat for them to feel like they're better off. While it's possible Jamario and J.O. could help put them in a position to contend over the next couple of seasons, it's not only unlikely, it's irrelevant. Riley's entire purpose for this trade was to clear cap space for 2010 when Dwyane Wade, Chris Bosh and LeBron James are all free agents — and jettisoning Marcus Banks' $4.8 million contract for the 2010-2011 season accomplished that. Add in the protected first round pick Riley finagled from the Raptors and it's not hard to see why Heat fans are so pleased.

Now, how can the Raptors end up better off as a result of this trade? Well, either Marion re-signs with the Raptors for next season and helps the Raptors make the playoffs or his expiring contract helps Colangelo sign players that help accomplish that goal. Either way, the point is to convince Chris Bosh that he should re-sign with the Raptors in 2010. That's the endgame here, and if the Raptors don't make the post-season in 2010, Bosh is probably gone and there can be no question this trade did not work out for the Raptors.

I've been a pretty staunch defender of Colangelo's record before this trade, so it's been difficult to process how this deal came to be. Having given it enough thought, it's not only unsurprising the trade turned out this way — it was pretty much inevitable.

In every business negotiation — whether or not it's sports-related — the parties involved enter the negotation with their own relative positions of power. Most of the time, one party needs to make a particular deal happen more than the other party. The party who enters that negotiation with less need to finalize the deal is the side with greater negotiating power.

Which team had a greater need to make this particular trade happen — the team looking to add a post presence for their playoff run while they tried to clear some 2010 cap space sometime between now and next season's trading deadline? Or the team 13 games under .500 that is scrambling to appease their disgruntled fans and star player with one season remaining on his contract before he becomes an unrestricted free agent?

One way or another, Pat Riley figured out that Bryan Colangelo didn't just want to trade Jermaine O'Neal for Shawn Marion — he needed to make this deal happen. Once Riley determined this, he knew he could shoot for the Moon (pun intended) and make Colangelo take Banks' stinky contract while he gave up Jamario and a first round draft pick. If Colangelo had refused any single aspect of the deal, Riley knew he had the power to walk away and explore other deals. Maybe Riley would have come back and agreed to a lesser deal by the trading deadline, but Colangelo couldn't have known that. And since he didn't want to risk the chance that Marion would get traded somewhere else, he agreed to Riley's terms.

With this trade, Pat Riley demonstrated to everyone how you negotiate from a position of greater power. Combine that power dynamic with the fact that Riley is a one of the shrewdest GMs in the NBA, and it's fair to say that Bryan Colangelo didn't stand a chance of "winning" this trade. 

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