I am a Lebron fan, so Steph Curry right now does not have a special place in my heart. But if the King can respect Steph Curry’s success, then so can I. One thing I admire is how Steph Curry went from being the most underpaid talent in the NBA – $10M a year – to securing the best athlete deal ever – at $40M a year. This is a better deal than Michael Jordan, in his best year. This is the best deal in all sports combined. In one day, he will earn more than 95% of Americans earn in a year – $110K. This is $170 per second for each game. This is not including his Under Armor deal or any other sponsorship deals. This is a big deal!
How many of you think this is too much money for a single person to earn? I bet many. Allow me to test this belief by sharing two key principles in negotiation: VALUE, and PATIENCE.
1. How to define value for a basketball player?
We need to think about who actually decides the value of a player. There are 2 different sides: Steph Curry’s manager and the owner of the Golden State Warriors. Steph Curry’s manager can look at it from different angles. Look at past players such as Jordan, current players such as Lebron, or even the “designated veteran player” salaries of up to $210 million. One thing that is for sure is that he aimed high. This is great to start a negotiation!
Let’s look at it from the perspective of the Golden State Warrior owner, Joseph Lacob. $200 million surely is a lot of money… or is it? Consider this: In 2010 Jacob bought the Warriors for $450 million. Now, they are worth $2.6 billion. We will all agree that Steph Curry is an essential part of the Warriors success. Therefore he played a big part in generating a whopping $2 billion value for the franchise. Do you still think he is being overpaid?
2. Worst to best deal ever
I believe Steph Curry was patient and used the timing of the title to his advantage. He never complained about his original deal. He famously said: “Never count another man’s money….if I’m complaining about $44 million over four years, then I’ve got other issues in my life”. He was happy to receive a lower salary to build a winning team with amazing players. He even stated publicly that he had no intention to go anywhere else than the Warriors even as he became a free agent. I wonder how his agent reacted: “Steph don’t get rid of all our bargaining power!”. But the timing was right. Tremendous value was shown, the franchise value was at an all-time high, and so Steph’s salary cap was lifted because of his MVP and veteran status.
Challenge conventional value references. You think you are an exception? You believe you bring something unique? You know the situation changed in your favor? Don’t be afraid to ask for more and get what you deserve.
Be patient and master the concept of Net Present Value. Sure $1 today, for sure, is better than $2 tomorrow. But $1 today and the potential to get $5 tomorrow at a 75% chance is a great deal. Much better than getting $2 today and $2.5 tomorrow. Think about the long-term potential of any deal.