The negotiating QB

By on / Business Negotiations, Daily

Adapted from “The Brett Favre Trade: A Win-win Deal in a Win-lose Game,” first published in the Negotiation newsletter.

In the middle of the National Football League’s off-season, as legendary quarterback Brett Favre weighs for the third year in a row whether to return to football or accept retirement, it’s worth revisiting the negotiations behind his first comeback.

Just five months after hanging up his cleats in March 2008, Favre, the Green Bay Packers’ longtime QB, bounded out of retirement. Favre appeared surprised when the Packers, who had already invested in a new quarterback and strategy for the post-Favre era, failed to welcome him back with open arms. Because Favre had signed a “lifetime” 10-year contract extension with the Packers in 2001, the team had control over his future in the NFL. The QB known as the gunslinger suddenly found himself fighting to get on the field.

Despite pressure from a pro-Favre fan base, the Packers pursued their goal of keeping Favre in retirement by refusing to release him or trade him to a team in the same division. Favre complained bitterly to the press about Packers management and expressed an interest in being traded to the Minnesota Vikings, the Packers’ archrivals.

Packers president Mark Murphy offered Favre a 10-year, $20-million-plus marketing deal in exchange for staying retired. Favre turned him down flat.

“Frankly, Brett’s change of mind put us in a very difficult spot,” Murphy said in a statement to the press. But on August 4, the two sides reached a surprise truce. Favre reported to Packers training camp to compete with his replacement, Aaron Rodgers, for his former position.

Two days later, Favre left camp. “They don’t want me back, so let’s move on,” he said.

“It’s like a marriage that ends,” Murphy commented.

The next day, the news broke that the Packers had traded Favre to the New York Jets, a team Favre had shunned weeks earlier.

Acquiring superstar Favre, despite his age of 38, was an exciting development for a team that was working to rebuild from a losing record and underdog image. Moreover, the deal was an innovative one that created value for both the Jets and the Packers:

  • A contingent contract. In return for Favre, the Jets agreed to give the Packers a fourth-round selection in the college draft at the end of his first season. The teams factored different predictions of Favre’s success into their deal: the Packers will earn a third-round pick if Favre plays 50% of the Jets’ offensive snaps, a second-round pick if he gets 70% of snaps and the Jets reach the NFL play-offs, and a first-round pick if Favre gets 80% of snaps and the team plays in the Super Bowl.
  • A poison pill. The Packers took steps to ensure that Favre would not be traded to the Vikings by inserting a “poison pill” into the contract: if Favre is traded to Minnesota, the Jets have to give up three first-round draft picks to the Packers. The Jets are also barred from trading Favre to any team that would try to trade him back to the Packers’ division.
  • An open-ended contract. The Jets did not commit to keeping Favre, who earns a $12 million base salary, on the payroll for more than a year. “We’re going to take this one year at a time,” Jets general manager Mike Tannenbaum told reporters.

As for Favre, the move may have been an only slightly better prospect than returning to the abyss of retirement. Yet he made the most of it, playing a largely successful season with the Jets and following it up with another strong year with the Minnesota Vikings despite repeated injuries. To find out whether 40-year-old Favre has another contract negotiation in him, stay tuned.

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