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« The $20,000 phone call | Main | On the day everyone is pleased... »

A game theory of NFL negotiations

Off topic here, a bonus post for those that might be interested:

When two sides are negotiating over something that spoils forever if it doesn't get shipped, there's a straightforward way to increase the value of a settlement. Think of it as the net present value of a stream of football...

Any Sunday the NFL doesn't play, the money is gone forever. You can't make up for it later by selling more football--that money is gone. The owners don't get it, the players don't get it, the networks don't get it, no one gets it.

The solution: While the lockout/strike/dispute is going on, keep playing. And put all the profit/pay in an escrow account. Week after week, the billions and billions of dollars pile up. The owners see it, the players see it, no one gets it until there's a deal.

Seeing and counting money you don't get to touch is a very different story than merely imagining the money you didn't get to touch, money that's gone forever... Change the story, change behavior.

The alternative (if you don't do this) is that down the road, instead of announcing a deal where everyone gets a windfall, you are forced to announce a deal where everyone already starts way behind where they would have been in the first place. That money is gone forever, no one gets it back. The problem with the game of chicken is that someone has to lose.

I'm not even a football fan, but this seems like a clear way to both maximize value and minimize the damage to all those involved. Especially players with short careers and those fans with nothing to do on Sunday afternoons.

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