Roberto Carlos

Confidential Instructions for FC Flamengos Business Manager

You have been with the FC Flamengo Football Club for only three months. So far, things have been going well, but this negotiation with Roberto Carlos's agent will be your most important assignment to date. You want to make sure that your boss, the Director of Player Personnel, is pleased with the outcome. You met with the Director of Player Personnel yesterday, and gathered the following information:

The FC Flamengo Football Club is one of the oldest football clubs in Brazil. However, in the last five years the clubhas fallen on hard times. The worsening economy, an aging stadium, and the establishment of several new football clubs in the Rio de Janeiro area has meant the loss of many big name players and a string of losing seasons. As a result, FC Flamengo has fallen to the bottom of the "A" division of Brazilian football. FC Flamengo has lost some of its large corporate owners and has had to rely more and more on ticket sales to pay for player salaries.

Despite its worsening financial state, the club has managed to break even over the last few years even with declining attendance in its 35,000-seat stadium. The team is rebuilding and the quality of players has improved lately. However, the players are young and don't have a lot of name recognition, hence attendance has dropped off.

The new season is scheduled to open in three weeks. The regular season runs six months, and they play an average of two games per week. Last week, when FC Flamengo announced the roster for this season's team, they put Neymar da Silva Santos, the team's star forward and top goal scorer, on the short-term injury list. The team has not released any public explanation regarding Neymar's condition. However, your boss has told you that although Neymar is on theshort-term injury list, it is unlikely that he will play at all this season.

The specifics of Neymar's condition have not been released to the public because the team does not want to hurt ticket sales. Neymar is a first rate performer though he has not yet attained the popularity Roberto Carlos enjoyed atthe peak of his career. FC Flamengo has been unable to find another experienced A-division forward who has not already signed a contract for this season.

FC Flamengo has a young reserve forward who shows great potential, but the coaching staff feel that he needs anotheryear or two before he will be ready for a spot on the starting team. The

owners want a "star-attraction" in order to generate more ticket sales and another young unknown playerwon't meet that concern. This situation has put the club in a tight spot.

Fortunately, Roberto Carlos, a well-known and flashy, though somewhat aging forward, heard the rumors about Neymar and called the Director of Player Personnel to inquire about rejoining the team. The Director of Player Personnel is very interested in signing Roberto. You have scheduled an appointment with Roberto's agent.

Roberto Carlos played for FC Flamengo during the prime of his career. At his best, Roberto was a true star and had a large following inspired both by his flashy play on the field and his "Hollywood" antics off the field. Thinking Roberto had reached the end of his productive years when he turned 30, Rio traded him to another team for several young players. With his usual flare, Roberto went on to prove his critics wrong and had 1 and 1/2 good seasons with his new team. In the middle of his second season with the new club (3 and 1/2 years ago), Roberto incurred aserious injury to his left knee.

After an operation and several months of rehabilitation, Roberto began a comeback. The season after his injury he signed a contract with a new club, Sao Paolo, as a reserve forward. The next season he saw limited playing time as a reserve. Last year, he played more and while his knee appeared to hold up just fine, he didn't have the same flare.The coach of the Sao Paolo team felt Roberto's problem had less to do with his knee than with spending too much time in fancy restaurants and too little time in the training room. Carlos left the Sao Paolo team after a dispute with his coach over his limited playing time.

Now it is rumored that Carlos has been working to get back in shape. The owners are fairly sure that Roberto can help the team now, if for no other reason than he is still quite popular in Rio. As such, the owners and your boss are desperate to sign Roberto. When Carlos last played as a starting forward four years ago, he was paid $220,000. That was regarded as extremely high at the time (the average starting salary was $160,000), justified only by the fact that Roberto was at the top of his profession and had a significant following. Over the last four years, the salaries ofstarting players have nearly doubled.

Last year, with the Sao Paolo team, Roberto was paid $125,000 as a reserve forward. As a rule, most clubs pay starting players twice the amount received by reserve players. If the team's owners were to promote the young reserve forward to the starting role, they probably would pay him no more than $280,000 (twice his current salary of$140,000).

Lately, because of the declining attendance FC Flamengo needs to keep players salaries as low as possible. The club's average attendance used to be over 95%. Since the team has been losing both games and big name players, attendance has dropped to about 75%. This is also the team's break-even point. Anything less than 75% attendancewould cause the club to lose money.

In addition to the possibility of losing money due to declining attendance, FC Flamengo must also worry about losing its A division status. There are 26 teams in the A division. The top 16 teams advance to the playoffs. Under league rules, it is possible that if a team finishes in the bottom five for three consecutive seasons the League Commissioner can decide to drop that team down to the B division. Rio has finished in 25th place and 22nd place the last two years

respectively. Demotion would mean further financial losses and it would be an intolerable blow to the team's prestige.

This year, Neymar was to have been paid $300,000 (last year he was paid $240,000). In view of the emergencysituation and the great desire of the Director of Player Personnel to obtain Roberto Carlos, the owners of FC Flamengo have authorized you to offer him up to

$450,000 should that be necessary.

You should also bear in mind the potential adverse impact on future negotiations with other performers should you agree to an unusually high salary for Roberto. The Director of Player Personnel wants Roberto, although he worries that Roberto may be too old for the demands of a rigorous season. The Director hopes that with the proper physical conditioning and a little luck Roberto could play an entire season as a starter. In any event, there is little alternative for Rio, but it would seem that Roberto has few alternatives as he is still available so close to the start of a new season.Prepare for your meeting with Roberto's agent.

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Role Play:

Assigned Role:

INSTRUCTIONS: Please complete this worksheet on your own after you have reviewed your confidential role play information. You must complete this worksheet BEFORE you conduct the actual negotiation with your partner. You may use point form. You will hand in the worksheet, along with your joint Debrief sheet, after you have done the negotiation.

Your preparation for the Role Play will be more in-depth than this worksheet. Please keep your preparation notes handy so that you can refer to them while you are negotiating.

Issue-By-Issue Planning. For each of my issues, what is my (a) opening point, (b) target point, and (c) resistance point? (3 marks)

ISSUE OPENING POINT / TARGET POINT RESISTANCE POINT

2.

3.

My Interests. What I really care about. What are my wants, needs, concerns, hopes and fears. Note: this is not the same as issues; you do not have to provide one example of each of the above if it does not apply. (1 mark)

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Their interests. * What I think the other party really cares about. Their wants, needs, concerns, etc. (1 mark)

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My BATNA (walk-away alternative). What can I do if I walk away without an agreement? What is my best alternative (indicate with an *)? (1 mark)

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Their BATNA. What do I think their BATNA is? (1 mark)

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Overall strategy. What is the main strategy that I will use for the negotiation? Distributive or integrative? Justify your answer. (1 mark)

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NEGOTIATION AT 350000 WITH 20% BONOUS