Read full paper here.
II. First Official Negotiations
On November 15, 2009, Mayweather informed Schaefer that he now had permission to begin negotiations with Pacquiao and Arum about a potential dream fight showdown. In early December of 2009, several inside sources reported that the immense fan pressure for the fight jolted Schaefer and Arum to set aside differences and reach an agreement. It was reported that Mayweather agreed to the biggest hurdles (at that time), and apart from a few minor details, the deal was completed. However, the minor details escalated into large obstacles preventing an agreement to be reached. The major defeating obstacle to a successful negotiation rested in the attempted sequential bargaining where the Mayweather and Pacquiao teams discussed one issue at a time rather than utilizing simultaneous bargaining where several issues are under consideration at any given time. By independently discussing each issue, “negotiators cannot fashion win-win trade-offs among issues.” Furthermore, the negotiations were comprised of power stances, ineffective strategies, ego defenses, and questionable ethical tactics. This section addresses and analyzes the major negotiated terms and why no agreement was reached.
In mid-November of 2009, two venues appeared as the front runners for hosting the fight: Cowboy Stadium in Dallas, Texas and the MGM Grand Hotel in Las Vegas, Nevada. Arum raised the potential for hosting the fight at Cowboy Stadium because Texas, like Nevada, has no state income tax, Cowboy Stadium can seat over one hundred thousand people, the stadium roof is retractable, and Jerry Jones, owner of the Dallas Cowboys, offered a reported $25 million to host the fight. The night before Arum and Ross Greenburg (HBO Sports President) were supposed to fly to Texas and meet with Jerry Jones to finalize his bid for the fight, Schaefer contacted Arum, and said he refuses to go to Texas. When asked why Texas was not a viable Venue, Schaefer said there is not enough time to prepare an outdoor fight. Arum commented that his response “makes no sense” as the roof is retractable.
Furthermore, Arum stated that “maybe [Schaefer] had another reason [for not wanting the fight in Texas] that he didn’t articulate to me.” Beyond other reasons, externally, Schaefer’s last minute trip cancellation and removal of a venue without proper reasoning was a socially destructive power play. If Cowboy Stadium was not a viable option, it makes little sense that Schaefer waited until the night before the trip to cancel it unless he purposely wanted to agitate and disrupt the negotiations because Cowboy Stadium was Arum’s idea, and the cancellation humiliated Arum by forcing him to call off the meeting with Jerry Jones and Ross Greenburg. “Negotiators tend to like proposals that they make or ultimately accept more than other proposals; and they devalue proposals offered by the counterparty, not so much based upon the content of the proposal but upon who is offering it.” Thus, although Cowboy Stadium appears to be a viable option to host a large fight, the fact that the idea was proposed by Arum caused Schaefer to devalue the proposal and utilize an aggressive power play to reject Arum’s proposal.
In totality, Schaefer turned the venue negotiation into a social dilemma, specifically an ultimatum, where following the cancellation of the trip, Schaefer sent Arum a draft of a contract stating the venue must be the MGM Grand and nowhere else. In response to the social dilemma power play, Arum stated that “I feel totally humiliated . . . and I really don’t think Floyd Mayweather had anything to do with it . . . I can’t see why Floyd would have an agenda here. I just can’t see that.” Therefore, by not properly taking into account the additional parties’ interests, Schaefer engaged in a trust eliminating and socially disruptive power play resulting in a further rift between the two parties, and illustrated that the hard bargaining negotiation approach created more obstacles than agreement.
The next obstacle in reaching a fight agreement came from whether the date of the fight would be in March, May, or September of 2010. Through sequential bargaining, no other fight issues were initially interlaced with date discussions. The major date obstacle was that Pacquiao was recovering from a ruptured eardrum, and Pacquiao was running for political office (House of Representatives) in the Philippines which held their elections in May of 2010. Thus, the Mayweather camp wanted the fight to take place in March or May to limit Pacquiao’s recovery period, and to overload Pacquiao’s training schedule with election preparation activities. As each issue in sequential fashion is an independent negotiation, the date negotiation revealed the first time either party had alternatives, and the alternatives were clearly placed on the negotiation table. Mayweather’s interests in the fight date would be served by having the fight as early as possible and directly before or during the elections. Consequently, Mayweather’s preferred date was in May to force Pacquiao to juggle fight preparation and the election; however, Mayweather’s best alternative to a negotiated agreement (“BATNA”) was for the fight to take place in March to limit Pacquiao’s recovery time and occupy his pre-fight routine with pre-election activities.
Although Pacquiao was concerned with recovery time from his eardrum rupture, a fight in May would be incredibly difficult with the elections taking place. Consequently, Pacquiao’s target point was a mid-March fight date with his BATNA being in September because the election in May would restrict his ability to thoroughly train in May, and the subsequent months would be filled with political activities if he won the election. (Pacquiao won a landslide victory and was elected to the House of Representatives). By matching Pacquiao’s target point and Mayweather’s BATNA, the two camps reached a tentative agreement to fight on March 13, 2010 conditioned on reaching an agreement as to the boxer’s fight weight and boxing glove weight.
The core of the fight weight and glove weight negotiations were that Mayweather wanted to fight with ten ounce gloves at a fight weight limit of one hundred and fifty-four pounds while Pacquiao wanted to fight with eight ounce gloves at a fight weight limit of one hundred and forty- seven pounds. Arum contested that the differences were trivial and would not halt the negotiations. Arum’s view on the negotiation fits squarely with the naïve realism principle in which “people expect others to hold views of the world similar to their own.” Arum’s view was reasonable, Pacquiao is a much smaller person, and it would not be possible for him to reach a weight of one hundred and fifty-four pounds, let alone, maintain that weight up to the fight. While Pacquiao’s anchor point for the negotiation was actually a firm offer he could not move above, Mayweather’s initial weight term offers were a high, though reasonable, anchor point.
However, under the extremism principle, “each side views the other [side] as holding more extreme and opposing views than is actually the case.” Mayweather agreed to Pacquiao’s weight terms, however, Pacquiao fearing that Mayweather will not actually abide to the one hundred and forty-seven pound weight limit, requested a $10 million per pound weight penalty. Media speculation and insider comments pointed out that the $10 million per pound penalty is extreme and not in line with the more typical $300,000 per pound weight penalty. However, Mayweather did not find the $10 million weight penalty to be extreme considering the magnitude of the fight, nor did he find the penalty clause to be opposing his good will in agreeing to the one hundred and forty-seven pound weight limit. Therefore, the negotiation momentum appeared to be rolling as the extreme positions did reflect reality.
The steroid accusation first made by Mayweather Sr. through an ego defensive response in the pre-negotiation phase returned to the negotiation table delivering a knock-out to the negotiations and preventing the dream fight from taking place. In a “highly unconventional move,” representation of Mayweather demanded that both fighters be subjected to random, Olympic style (blood) drug testing leading up to the fight and directly following the fight. According to Mayweather, the blood-drug testing in not negotiable, however, Pacquiao stated that he is willing to submit to as many random urine tests as required. But, because Pacquiao has problems with the drawing of blood, he will only submit to three blood tests: one given the week the fight is formally announced, a second thirty days from the fight, and a third directly following the fight in the locker room. Dr. Keith Pyne, a private injury consultant for the NFL and athletes who compete in running and combat sports, stated that “urine testing is sufficient . . . you won’t miss anything, especially with performance enhancing drugs . . . as there is no way for the steroids to pass through the liver and kidney without being detected.” In response, Mayweather’s side attacked Pacquiao’s ego claiming that the dream fight will not take place if Pacquiao does not agree to random blood testing, and that it is a poor excuse for a man who has tattoos all over his body to claim that he does not like to be “pricked” by needles.
Power negotiating is the “ability to coerce someone to do something he . . . would not otherwise do.” Pacquiao’s stance is that Mayweather is attempting to bully him into taking additional blood tests, something that he normally would not do, by implying in their statements that Pacquiao is using performance enhancing drugs and, thus, injuring Pacquiao’s image through connecting it directly with steroid use. The power negotiating strategy has one major flaw, power negotiating may be successful when one party is more dependent on the other party; however, both parties are mutually dependent because the dream fight cannot occur without the other, and Mayweather and Pacquiao are both the top fighters with championship belts. In response to Mayweather’s power play, Pacquiao offered a twenty-four hour ultimatum- Mayweather must agree to Pacquiao’s drug testing terms or the fight will not occur. Therefore, a deal cannot be made when both parties are not willing to budge through the implementation of power negotiation.
Pacquiao, however, emphasized that his refusal to agree to the blood testing is more than just a fear of needles or a firm power negotiation stance, but that the drawing of blood is actually a sacred value he refuses to breach. Sacred values are “those values and beliefs people regard to be so fundamental that they are not discussible nor debatable . . . Sacred values resist tradeoffs with other values . . . .” Pacquiao stated that withdrawing blood from his body is not natural in Philippine culture. Pacquiao stated that “the truth is taking blood out of my body does not seem natural to me, and mentally, I feel it will weaken me if blood is taken from me just days before the fight.” Consequently, Pacquiao’s camp offered a second ultimatum requiring Mayweather to agree to the drug testing terms (including the thirty day pre-fight blood draw) or the fight will not take place. The “apparent” cross-cultural misunderstanding, though having the potential to derail the negotiation, never surfaced as an actual cause for the failed drug testing negotiations.
In actuality, Pacquiao’s cultural defense to not wanting to take the blood steroid tests turned out to be, in Mayweather’s perspective, active misrepresentation. Pacquiao utilized his claimed fear of needles and a cultural defense to mislead the Mayweather camp into believing Pacquiao absolutely would not take a blood steroid test within thirty days prior to the fight. Documents confirmed that the HBO Sports video (which had just been released on HBO and followed Pacquiao as he prepared for the aforementioned fight with Ricky Hatton) showed Pacquiao giving blood for a steroid test leading up to his fight with Hatton was recorded twenty-four days prior to the Hatton fight and past the thirty day cut-off date that Pacquiao had demanded on in his Mayweather negotiations. Although active misrepresentation may be strategic though unethical, when discovered, it creates an intense situation of mistrust and disdain for the opposing party. A formula that is not conducive to a successful negotiation.
In response to the HBO footage date confirmation, the Nevada State Athletic Commission ordered Pacquiao and Mayweather to submit to steroid tests, which they both passed. Pacquiao insisted that he never took steroids, but the steroid accusations became part of his self-concept, making all opposition an ego threat and image threat. Through retaliatory efforts, Pacquiao released negative perceptions of Mayweather and his team, stating that “I can’t believe these guys can lie without batting an eyelash . . . [they are the] culprits for the delay of the fight.” However, “one cannot characterize self-interest as bad faith. No particular demand in negotiations could be termed dishonest, even if it seemed outrageous to the other party. The proper recourse is to walk away from the bargaining table, not sue for bad faith negotiations.” Pacquiao though, took the fight into the court room, filing a lawsuit against Mayweather, Mayweather Sr., and Schaefer for making false and defamatory statements out of “ill-will, spite, malice, revenge, and envy.” Therefore, the power negotiations resulted in Mayweather and Pacquiao claiming the other side partook in active misrepresentation. The ego enthralled steroid test negotiations resulted in a further divide between the parties and created a hostile negotiation with no agreement reached.
In totality, the sequential bargaining prevented the parties from finding creative solutions and moving beyond the fixed-pie perception. The negotiation pie was never fully understood as the interests of Arum and Schaefer were never realized. The official negotiations in the face of ongoing egocentric and power plays, including unethical negotiating behavior, created a rift between the parties resulting in a failed negotiation for what (still) could be the biggest financial boxing match in history.
III. Moving The Fight Out Of The Media And Into The Ring
The Pacquiao-Mayweather dream fight will likely be the largest financial fight in boxing history. However, the dream fight negotiations are ripe to fail once again because of the sequential power bargaining and egocentric approaches both sides maintain. On the contrary, the negotiations can prove successful by following the proposed negotiation strategies. First, is to alter the platform from a power based approach to an interest based approach. Specifically, the fighters need to be reminded that their failure to fight is a direct slice into their egos, meaning that neither of them can be regarded as the best fighter of their generation if they do not fight and settle the dispute. Second, simultaneous bargaining must take place in an environment without the media hounding each individual move. Thus, the perception of who “won” the negotiation will not be as drastic if the media cannot observe every offer by both parties.
As to the specifics, the fight purse should be divided 50-50, but a ten percent bonus should be awarded to the winner of the fight. Therefore, no party will receive less than fifty percent, and the winner will receive sixty percent (the number both parties originally sought). Furthermore, the weight and venue negotiations should retain the results already agreed. Finally, an unlimited amount of random drug urine tests should be allowed per Mayweather’s request, and Pacquiao’s relentless agreement to that term. As to the blood testing, Pacquiao has established precedent that he is willing to partake in blood tests within thirty days prior to the fight. Consequently, unlimited blood testing should be allowed up to forty-five days prior to the fight. A mandatory test should be required thirty days and fourteen days before the fight. Also, a blood test should be taken days before the fight at the official weigh-ins and another test taken directly after the fight. Hence, the fans, media, and fighters will finally witness the dream fight.
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