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Saturday, October 20, 2007
 
The Torre Travesty -- A Dysfunctional Family Business

Over the last 35 years, one constant refrain in New York sports has been the on and off-field soap opera known as the Yankees. The latest act was the attempt or non-attempt to secure a new contract for its now former manager Joe Torre. Many journalists and fans have expressed their views, with an overwhelming sentiment that Torre was poorly treated by the team. That view was reinforced by his press conference where he concluded that the team's offer of a one-year, incentive-laden contract was an insult based on his success as manager of the team over the last 12 years. I tend to agree with this view.

But that is not why I'm writing. Instead of my legal cap, I'm putting on my business school hat to analyze what went wrong from a tactical and managerial view and how this portends bad times for the team.

"Getting to Yes" is a term frequently used in negotiation strategy. It comes from a now-classic text by Prof. Roger Fisher, one of the gurus on the subject. I won't and can't summarize the book here, but there are a few important points he and his co-authors say about negotiation: it is a creative process, and the negotiator should seek to invent new options that might satisfy both parties' needs and should take the other side's needs in account when making new proposals. This did not happen here. In fact, this can be a case study in violating these norms and destroying a longstanding relationship.

Let's start with the fact that there is no one steward running the Yankees, but a dysfunctional family operation. George Steinbrenner is, to put it politely, not as active as he once was, but the reins of power have not been transferred in a coherent manner. So, we have several chefs -- his two sons Hank and Hal (who were thrust in positions of power relatively recently) , because the former son-in-law was yanked out after his wife filed for divorce), along with others in the brain trust such as team president Randy Levine, CEO Lon Trost and GM Brian Cashman.

I think the offer that was made -- one year $5 million, plus incentives for advancing in the post-season, was a product of a consensus. Some wanted Torre out altogether while others wanted to sign him to a more stable and long-term contract. No one side had absolute control, so a compromise was proposed -- one that was perceived either to be half a loaf, or a half-baked offer -- give him a temporary agreement with bonuses and see what happens next season. Did anything really think Torre would accept this?

Say this George Steinbrenner. He managed by decree, was dictatorial and sometimes irrational. Management by fear is not ideal, but everyone knew that decisions would be quick, direct and blunt. Steinbrenner the Elder would not have equivocated and would have decided not to new the contract within 48 hours of the team's elimination by the Cleveland Indians.

Now, let's examine the terms of the offer. The proposal treated Torre as a new applicant rather than a seasoned veteran. They did not guarantee the contract for more than one year. In sports, this is akin to an employee at will. That, While some in the Yankees' brain trust thought that a bonus system would work, it inferred that Torre needed the extra incentive to win in the playoffs. For a committed baseball person like Torre, that was too much.

Then there is the delay before the proposal -- an unconscionable length of time given the circumstances. To have Torre wait 10 days for an offer simply made him more resentful. From a negotiations point of view, it sent mixed signals at best and an implied message of we want you, but we REALLY do not want you at worst.
Finally, the offer was not negotiable. No counter proposals, no discussion, no debate. It was contract negotiation by dictat, which presupposed two things: (1) that the Yankees had a superior bargaining position, or (2) they just went through the motions. If it is the second, it certain guaranteed not "Getting to Yes" and served no useful purpose.





7 Comments:

I completely agree with the portion of this article which refers to the different opinions regarding Torre among the "geniuses" running the Yankees. I thought about that when I heard the terms of the deal announced. However, even with the dysfunctional transition that is taking place with Yankees, if big George had really wanted Torre gone, Torre would have been gone immediately. It seems as if George sincerely wanted to keep Torre while others, Cashman specifically, wanted Torre to be sent packing. Maybe big George is losing a little bit of his edge in his old age. - Trent Lowry

Anonymous Trent Lowry -- 10/21/2007 9:55 PM  


Hi Trent,

Thanks for your comments. I just wanted to hypothesize on your last point. I have no direct knowledge, so this is an educated guess (if such a concept really exists). I think that Steinbrenner the Elder is in greater decline that many may think and either could be more easily persuaded by others or simply not as strong-willed about quick decisions as he was. This transition has been so awkward to make it a case study in business schools. Everything seems very disjointed.

Blogger Mark Conrad -- 10/21/2007 10:30 PM  


I think this is a good analysis of what happened with Joe Torre. I am currently a 3L and just finished the book, "Getting to Yes" for ADR/Mediation class. Apparently George hasn't read that book...Maybe Steinbrenner is just so smooth that he purposely low balled Torre by at least offering an incentive laden contract rather than no contract at all in hopes that Torre would turn down the deal and they would then hire a new manager. Just a different spin on the PR aspects of what happened. I don't really think the Yankees or Steinbrenner would purposely do such a thing, but you never do know...

Anonymous Tim -- 10/22/2007 2:31 PM  


I agree that it looked like an offer where the intention was to get a "no." They wanted to replace him but the fans wanted to keep him. I think the management wrongly believed that the fans would side with them if they offered him the job but he turned it down. The incentives at first blush give the appearance of wanting to win, i.e. bonuses for winning it all. But when you look at his history it does come off as an insulting way of suggesting that Torre didn't previously have incentive to manage well in the playoffs. So I believe the team got what they wanted--Torre out. But the PR fallout is not good.

Anonymous Anonymous -- 10/22/2007 4:35 PM  


I am not at all surprised by the way these events unfolded. After all, we are talking about the Yankees here. If you're a fan of the Yanks (which I'm not), it's really a shame that one of baseball's most storied franchises is so poorly run. It has been poorly run for many years now. Steinbrenner has always been my way or the highway kind of guy, which is somewhat understandable since it is his hundreds of millions of dollars that have been thrown at big name free agents to try and buy championships. According to the Steinbrenner school of thought, the Yankees are "supposed" or "entitled" to win championships every year, not taking into account that there are 30 something other teams in professional baseball who might also have a shot. Ok, realistically that number is more like 5 or 6 on a yearly basis, but still you all get the point. And I have to disagree with Trent. From all accounts, it was Steinbrenner who wanted Torre gone and Cashman who wanted Torre back. It was widely reported that Cashman convinced Steinbrenner not to fire Torre after last season.
Certainly, this offer was a slap in the face to Torre and why wouldn't it be? He only brought the Yankees 4 world series titles in his first 5 seasons. Keep in mind that this was before the Yanks had A-Rod, Jason Giambi, or Bobby Abreu. The reason the Yanks have not been to the promise land recently is pretty simple: lack of starting pitching and general decline in the farm system. You can only buy so many wins by throwing millions at big-name players. Look at the Cardinals last year: they won the World Series with what many considered a 2nd rate pitching staff and only a decent offense. The difference, they played with heart and desire. I've seen neither of these recently from the Yankees and I don't blame that on Torre. There are simply too many big egos and agendas in the locker room. The Yanks starting pitching has been suspect at best for the past 5 seasons and has only gotten worse. Most of today's best pitchers are products of a team's development system and not has-beens like Mike Mussina or Roger Clemens. I'll concede that Pettite still has some gas left in the tank.
Lastly, Torre was well-liked by his players and has been known to be good at bringing a locker room together. He had to do that in New York because of all the Texas-sized egos in that locker room. His track record of being a player's coach is hard to dispute and goes back to some of his less-successful managing jobs. The Cardinals come to mind as he managed there for several years and was well-liked. The offer made to him WAS insulting and I don't know how anyone in their right mind can say otherwise given Torre's track record. I don't think the Yankees' fortunes will get any better until their ownership adopts a new philosophy, preferably one not nearly as arrogant or self-centered.

Blogger John Biggs -- 10/23/2007 10:06 PM  


Being from California, I usually see thigs from that perspective. If you look at the Los Angeles Dodgers and the O'Malleys (Walter and Peter) and how they ran the team, you have to say CLASS.

Walter Alston was the manager for 23 years and only had one-year contracts. But there was mutual respect. And then came Tommy Lasorda and he also had one-year contracts--and when they (the O'Malleys)knew it was time to get a new manager, they kept Tommy with the team (50 years)in another capacity.

The Steinbrenners could have offered Torre a V.P. of something, (that way you don't have to give salary information) and Torre would not have had to have been embarrased. Then in a little while, Torre could let out of the bag that even though he had a good position with the Yanks, he missed being a manager. That would be a subtle way letting teams know he's looking for a job.

Off topic- It is a shame that Peter had to sell the team (family dynasty)to save his kids from a huge tax bill.

Anonymous Anonymous -- 10/24/2007 2:06 PM  


I think the Yankees made a reasonable offer to a manager they were seemingly ready to part with. Out of respect for Torre's accomplishments, they made him a lucrative one year offer that increased with his team's favorable playoff performance. This "no negotiation" tatic used by the Yankees achieved two favorable results. By basically forcing Torre into the decision to leave and making him feel unwanted, evidenced by a salary reduction, they also saved face with their all important fan base. The fans were clamoring for Torre's return during the weeks leading up to the salary negotiations. To be able to blame Torre for the parting of ways is invaluable to the Yankee brand.

Anonymous Kate Steiner -- 11/07/2007 9:42 PM  


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