Negotiation Project: Celebrity Endorsement Contract Analysis

This project analyzes a negotiation scenario for a celebrity endorsement contract between a sports star (Kobe Bryant) and DeGrandis Sporting Goods. The assignment begins by defining the Best Alternative to a Negotiated Agreement (BATNA) for both parties, including potential deals with Exercise Supplies for the athlete and the possibility of alternative endorsements for the company. It also identifies the Zone of Possible Agreement (ZOPA), considering the reservation values and desired terms of each party. The project outlines the negotiation process, including communication logs detailing discussions on price and contract terms, and ultimately concludes with a letter of advice to the client summarizing the negotiated agreement, which includes a price of $625,000 for a 3-month term and a contingency clause based on sales revenue. The analysis incorporates relevant negotiation concepts and strategies, providing a comprehensive overview of the process and outcome.

Running Head: NEGOTIATION
NEGOTIATION
Name of the Student:
Name of the University:
Author Note

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Stage 1
1
The Best Alternative to Possible Agreement for Elite Sports Stars in relation to an
endorsement contract with DeGrandis Sporting Goods with respect to Kobe Bryant for the
negotiation of an advertising campaign contract to endorse basketballs sold by the company are
as follows.
The First BATNA would be a deal with alternative sporting goods retailer, Exercise
Supplies who have offered to provide a contractual fee of $521,740 which can also go up by 15%
as a result of negotiation. This means that if we will not be able to get a favourable deal with
DeGrandis Sporting Goods we would still have the option to carry forward a deal with Exercise
Supplies in relation to endorsement contract. Therefore when we would be getting into a
negotiation with the other party we would have to keep in mind that the deal cannot be less than
$521740 + 15%. Therefore this value can be considered as the reservation value for us.
In relation to the term of advertisement we do not have a BATNA yet and it is dependent
on the negotiation which is carried out with Exercise Supplies.
2
The Best Alternative to Possible Agreement for DeGrandis Sporting Goods in relation to
an endorsement contract with Elite Sports Stars with respect to Kobe Bryant for the negotiation
of an advertising campaign contract to endorse basketballs sold by the company are as follows.
The other party in the negotiation has a BATNA that they can get into a contract with
another basketball star in relation to the contract. However, their BATNA would not be

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considered as very strong as they would be eager to endorse basketball star Kobe Bryant for the
advertisement campaign in relation to their product. The party we would be negotiating with in
relation to the situation is Pisey Kim. The reservation value for the other party would not be high
initially as they have a much lower estimate which they may use to justify a lower advertising
campaign contract fee. Therefore we estimate the reservation value to be around $550000 +/-
20%. In relation to the term of advertisement, the other party would be long for a long term
association.
3
ZOPA range is the Zone Of Possible Agreement Range (Pinkley et al. 2018). This is also
known as bargaining range and points out an intellectual zone between two parties where both
parties can reach an agreement (Coburn 2015). Outside this zone there is no chance of any
agreement between the parties (Su, Chen and Ro 2017). For instance, where there is a person
who wants to give money at a rate of interest for a specific period of time and other person who
wants to borrow has another interest in mind. In case, both the parties have come to a mutual
understanding in relation to the rate of interest than it can be stated that a possible zone of
agreement has been established between the parties (Pacella et al 2017). The understanding is
ZOPA is essential for the carry out a negotiation in a proper manner. Both parties have to
understand the value and needs of each other to find out whether there is a ZOPA or not (Coburn
2015). This has to be carried out in the early stages of the negotiation and also has to be changed
when more information is derived (Elfenbein 2015).
BUYER RANGE
Zone Of Possible Agreement
SELLER RANGE

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Thus in order to find out the ZOPA in this case we need to analyze the reservation values of the
parties. When we would be getting into a negotiation with the other party we would have to keep
in mind that the deal cannot be less than $521740 + 15%. Therefore this value can be considered
as the reservation value for us. The reservation value for the other party would not be high
initially as they have a much lower estimate which they may use to justify a lower advertising
campaign contract fee. Therefore we estimate the reservation value to be around $550000 +/-
10%. In relation to the term of advertisement, the other party would be long for a long term
association. From both the ranges it can be state that the zone of possible agreement is as
follows:
ZOPA for the Negotiation Situation

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References
Carbonneau, R.A. and Vahidov, R.M., 2014. A utility concession curve data fitting model for
quantitative analysis of negotiation styles. Expert Systems with Applications, 41(9), pp.4035-
4042.
Coburn, C., 2015. Negotiation conflict styles. Boston: Harvard Medical School Ombuds.
Dell’Aquila, E., Marocco, D., Ponticorvo, M., Di Ferdinando, A., Schembri, M. and Miglino, O.,
2017. ENACT: virtual experiences of negotiation. In Educational Games for Soft-Skills Training
in Digital Environments (pp. 89-103). Springer, Cham.
Elfenbein, H.A., 2015. Individual differences in negotiation: A nearly abandoned pursuit
revived. Current Directions in Psychological Science, 24(2), pp.131-136.
Mahmoud, M.A., Ahmad, M.S., Yusoff, M.Z.M. and Idrus, A., 2015. Automated multi-agent
negotiation framework for the construction domain. In Distributed Computing and Artificial
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Differences, Communication Styles and Finding Mutual Understanding. Asian Dispute Review,
16(3), pp.132-136.
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States face, facework, and conflict styles during interpersonal conflict: An application of face-
negotiation theory. Journal of International and Intercultural Communication, 9(1), pp.1-19.

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Pacella, D., Dell’Aquila, E., Marocco, D. and Furnell, S., 2017, August. Toward an Automatic
Classification of Negotiation Styles using Natural Language Processing. In International
Conference on Intelligent Virtual Agents (pp. 339-342). Springer, Cham.
Pinkley, R.L., Conlon, D.E., Sawyer, J.E., Sleesman, D.J., Vandewalle, D. and Kuenzi, M.,
2017. Unpacking BATNA Availability: How Probability Can Impact Power in Negotiation. In
Academy of Management Proceedings (Vol. 2017, No. 1, p. 16888). Briarcliff Manor, NY
10510: Academy of Management.
Rahim, M.A., 2017. Managing conflict in organizations. Routledge.
Su, H.C., Chen, Y.S. and Ro, Y.K., 2017. Perception differences between buyer and supplier: the
effect of agent negotiation styles. International Journal of Production Research, 55(20), pp.6067-
6083.
Ting‐Toomey, S., 2015. Identity negotiation theory. The international encyclopedia of
interpersonal communication.
Tu, Y.T., 2014. Cross-cultural equivalence and latent mean differences of the Negotiation Style
Profile (NSP-12) in Taiwan and US managers. International Journal of Intercultural Relations,
43, pp.156-164.
Tu, Y.T., 2015. A Cross-Cultural Comparison of Brazil, Russia, India, and China (BRIC) on
Negotiation Styles. The Anthropologist, 19(2), pp.457-467.
Zarei, A., Hassannejad, M. and Ganjouei, F.A., 2016. Explaining the role of negotiation skills in
conflict management among physical education experts. International Journal of Humanities and
Cultural Studies (IJHCS) ISSN 2356-5926, pp.1893-1903.

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Stage 2
Date Communication
Method Item Discussed
Outcome Notes
10/2/2019 Phone Contingency
clause
The contingency
clause was
agreed which
states that if the
terms sale
proceeds are
2.2m than the
price would be
625000 or else it
would be given
on pro-rata basis
The clause has
been agreed
11/2/2019 Phone Term The term was
agreed to 3
months in
relation to the
advertisement
endorsement
contract
Final term
agreed which
has a neutral
impact on future
contracts
12/2/2019 Meeting Price The price was
agreed to be
The final
negotiation was

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625000
subjected to the
contingency
clause
concluded
The contingency clause
“if the terms sale proceeds are 2.2m than the price would be 625000 or else it would be given on
pro-rata basis”

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Stage 3
Letter of Advice
To
The Client
Respected Sir
This letter of advice is in relation to the negotiation of an advertising campaign contract to
endorse basketballs sold by DeGrandis Sporting Goods. We want to let you know that we have
got a deal with DeGrandis Sporting Goods in relation to the advertising campaign. This deal has
been finalized for a price of $625000 and for a period of 3 months. We would like you to know
that as the First BATNA we had a deal with alternative sporting goods retailer, Exercise Supplies
who have offered to provide a contractual fee of $521,740 which can also go up by 15% as a
result of negotiation. The price was coming up to $600000. On the other hand the other party in
the negotiation had a BATNA that they can get into a contract with another basketball star in
relation to the contract. However, their BATNA was not considered as very strong as they would
be eager to endorse you for the advertisement campaign in relation to their product. In order to
find out the ZOPA in this case we had to analyze the reservation values of the parties. When we
would be getting into a negotiation with the other party we would have to keep in mind that the
deal cannot be less than $521740 + 15%. Therefore this value can be considered as the
reservation value for us. The reservation value for the other party would not be high initially as
they have a much lower estimate which they may use to justify a lower advertising campaign

10NEGOTIATION
contract fee. Therefore we estimate the reservation value to be around $550000 +/- 10%. In
relation to the term of advertisement, the other party would be long for a long term association.
The ZOPA was also identified to be $625000 and 3 months term. We also have a contingency
clause in the contract according to which of their sales are around 2.2 million then we would be
getting the price mentioned above. We are sure according to reports that the company would for
sure be making 2.2 m from basketball sales. Moreover a 3 month terms would not have any
negative impact on any future endorsement contracts you get into although it does not have any
positive impact either. This situation can be stated to be in our favour. We hope that you are
satisfied with the results of the negotiation we carried out on your behalf.
Yours faithfully