Negotiator Knows: 'Never Make The First Offer'

Donald Dell was one of the first agents for professional athletes — think Stan Smith, Michael Jordan, and Andy Roddick — and he's one of the greatest dealmakers ever. He shares his secrets in Never Make The First Offer.

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NEAL CONAN, host:

This is TALK OF THE NATION. I'm Neal Conan in Washington.

Everyone, that's everyone, has to negotiate from time to time: a salary, a sale, a business deal. Whether you're trying to get a little bit more for your old jalopy or pay a little bit less for an office tower, the art of the deal is one of the life lessons worth honing over and over again.

Donald Dell sat at the table for some of the biggest, most interesting and toughest negotiations in sports, like Michael Jordan's salary and MJ's percentage of every pair of Air Jordan's. His clients have included Arthur Ash, Stan Smith, Jimmy Connors, Patrick Ewing and Andy Roddick and dozens of others. Over four decades, he's learned a lot about closing the deal. And joins us to share the wisdom in his new book, "Never Make the First Offer: Except When You Should."

Later in the hour, four years after Katrina, we'll check in with the editor of the Times Picayune. If your life was changed by the storm, how are you doing? Email us: talk@npr.org. But first, we want to hear from dealmakers in the audience, what's worked, what flopped? Give us a call: 800-989-8255. Email us: talk@npr.org. You can also join the conversation on our Web site at npr.org, click on TALK OF THE NATION.

Super agent Donald Dell founded the agency ProServ, his book is called, "Never Make the First Offer." He joins us here in Studio 3A. And thanks so much for coming in.

Mr. DONALD DELL (Founder of ProServ; Author, "Never Make the First Offer"): Pleasure, Neal.

CONAN: And let's start with that title, "Never Make the First Offer"?

Mr. DELL: Well, I tried to soften it a little bit. Generally, you don't want to make the first offer. You want to - really it's a question of listening and learning by the other person making the first offer. That's really the purpose of it, is to learn some information by not opening the offer.

CONAN: There's an example, you give in a conversation, where somebody says - well, were not you - higher authorities won't let me make the first offer.

Mr. DELL: Well, that's happened to me. Actually, it happened with the president of the Los Angeles Lakers a few years ago. I said, you know, my boss and owner Jerry Buss won't ever let me make the first offer. And I said, well, then we're going to be here a long time…

(Soundbite of laughter)

Mr. DELL: Looking at each other, and maybe we can talk about the latest movies or your career, your sex life or whatever you want. And truthfully, we both sat there for about two minutes. Nobody spoke and it seemed like about two years. And then he said, well, I'll go ahead, you know, I said - well you, you know, you drafted him, you should make the first call.

(Soundbite of laughter)

CONAN: There are situations, however, like you say in your title, where you should make the first offer, when is that?

Mr. DELL: Well, if you're in a situation where you somehow have prior knowledge or information that the person you're dealing with may come in with a very, very low offer. Then it seems to me wise to get your offer on the table. We've had that a few times. We did have once with Michael Jordan, where we were renewing his contract after a few years in the Bulls. And the owner, I wanted a very large sum of money in the $40 to $50 million range. And the owner was talking and I saw a note on his table, on this piece of paper. That he was talking about $4 million.

So, I realized, I didn't want him to make the first offer and start at $4 million. So, I turned it around and said: Jerry - it was Jerry Reinsdorf - I said, let me make the first offer. And I opened with about $45 million and he said, wait a minute, I'm at about four. And I said, well, there's a real gap then between us.

(Soundbite of laughter)

Mr. DELL: And there was.

CONAN: Obviously, you later reached an agreement.

Mr. DELL: Well, Michael Jordan was not hard to sell. He was fantastic.

CONAN: You wouldn't think so, but there's a negotiation you're involved with Nike, his second shoe deal with Nike. And you're dealing with Phil Knight, the head of the Nike Corporation. And obviously this is hugely important. He sold a ton of Air Jordans for Nike. Yet they are - he is determined not to give him the same deal they gave him the first time.

Mr. DELL: Well, the first time was very unusual and it let us - Jordan, no one knew, how dramatic or dominating he would be in basketball. Remember, in the NBA draft that year, coming out of Carolina, he was drafted third behind the Olajuwon and Sam Bowie up in Oregon. So, that was a big shock.

So, when we saw how well he was playing on the second contract negotiation, I wanted royalties across the board in a lot of their basketball shoes, not just the ones that had his name on it. And in those days, Nike was just getting into basketball. They had not broken the mold in that field as they have today.

CONAN: There is another of your suggestion. We've all seen movie, "The Godfather," make him an offer he can't refuse. You spin that on its back - make them an offer they can't accept. What are the circumstances when that's a good idea?

Mr. DELL: Well, I think you got to really try to judge. To me, negotiating contracts is really a study of human nature of the person you're dealing with. And that's why very quickly, if you've been in the business a long time, the sports industry is a very small industry. And everybody gets to know everybody. So what you do for one player three years later is going to be used for you or against you if you're back dealing with the same team or with the same company.

And so it's very - you got to be very careful when you make that first offer, which I never want to do. I want them to tell me what they have in mind. Occasionally you'll make an offer, but I don't like to make an outrageous offer. I like to, as I tell them, I don't want to come in and, you know, ask for a hundred and really hope to get fifty. They offer 10 and we split the difference. I just I don't like to negotiate that way. I don't think it's the best way to operate.

So I like to come in with a realistic number that I feel is reasonable under the circumstances, but it helps me knowing that to hear what they say first.

CONAN: Mm-hmm. You say it's a small industry and you're going to be dealing with these teams over and over again. Expect to make any deals with the Texas Rangers any time soon? Are you…

Mr. DELL: Probably not.

(Soundbite of laughter)

CONAN: Caustic things to say about Tom Hicks.

Mr. DELL: Tom Hicks, I think, sort of broke the mold when he signed Rodriguez to that $253 million dollar deal. I mean that was more money than he paid for the stadium and the franchise, if you can imagine, at that time…

CONAN: Mm-hmm.

Mr. DELL: …which was about eight or nine years ago. But I'm sure that the other owners in Major League Baseball were very unhappy with that deal. I had nothing to do with the deal, but I followed it closely and it was a staggering one.

CONAN: Yeah, but you say some other things about him. And, in fact, that he went back on his words.

Mr. DELL: Well we had a situation where we were negotiating and sold the rights in the U.S. Open tennis to a company he owned and started in South America called NPR, excuse me NPN, it's…

CONAN: Okay.

Mr. DELL: …and it was that…

CONAN: We've paid you every dime ever.

Mr. DELL: …and he brought back that particular cable station, which was copied ESPN's model. It was a sports only station throughout South America. And they broadcast a 110 hours of the U.S. Open that year.

And then when it came time to make the payment, the company declared bankruptcy. And so, he paid us nothing. And so I was adamant about that because I knew who Tom Hicks was. And they should have honored, because they got the product and they used it and broadcast it. And he took the position it was a bankrupt company. He didn't have to pay anybody anything.

But the catchall there was he was also a board member of Clear Channel, which is the largest advertising, outside advertising, on billboards and radio station. And so, I always felt Clear Channel, who I was working for, that they would get him the pony up and of course what happened was they didn't because unbeknownst to me, he was the shareholder of Clear Channel. So the board didn't really want to tackle him and he really got a free ride.

CONAN: We're talking with Donald Dell, the agent about his new book, "Never Make The Fist Offer, Except When You Should: Wisdom From A Master Dealmaker." We want to hear from the dealmakers in our audience. What's worked for you, what hasn't? 800-989-8255. Email: talk@npr.org. We will start with Michael(ph). Michael calling us from San Antonio.

MICHAEL (Caller): Hi, I just want to tell you guys about making a car deal. It was my first car. And my step dad said always be able to walk away from your car deal if it's not what you want. And I went in with an $18,000 car that I wanted and I asked for $12,500, below the Kelley Blue Book value. And I ended up walking away from it, and about 30 minutes later, right before closing they called back and said that they would give me my car…

CONAN: Wow.

MICHAEL: …that I wanted.

CONAN: So your dad's advice was right.

MICHAEL: It was right being able to walk away from the deal.

CONAN: Is that a good principle, Donald Dell?

Mr. DELL: Not only is it a good one, in my book I say it's probably the number one principle and the hardest one to do, because if the only way the other side is going to really know you're serious, and if you set your price, like this lady did, at $12,000, they turned it down, and then she said thanks, I'm not interested, I'm going to have to move on, that's the only time they really believe that you mean it. And so what she did was quite difficult and quite fantastic.

Walking away, being able to walk away from the table, is really the number one goal in effective negotiating.

CONAN: Michael, were there some butterflies in your stomach as you left that dealership?

MICHAEL: Oh yeah. I called my stepdad immediately and said, I really want my car, I really want it. And he said, if you want it, you can go back and get it, but it's up to you.

CONAN: Well…

Mr. DELL: That's terrific because you could always go back the next day. So you did the right thing. That's quite clear.

MICHAEL: And especially with everybody buying cars right now.

CONAN: Yes, indeed. For 18 grand, I suspect, the twelve-five car you bought was a clunker.

MICHAEL: No, it's actually a Toyota.

CONAN: Oh, good for you.

MICHAEL: It was a 2006, so…

CONAN: Well, congratulations, Michael.

MICHAEL: Thanks so much, guys.

CONAN: Bye-bye. Here's an email from Niko(ph) - I hope I'm pronouncing that correctly: For my job, they asked me how much I'm looking for in pay. I replied: What am I worth? They made me an offer, and I asked for more and got my pay. He made them make the first offer.

Mr. DELL: Well, I think that's a very good case in point. Also, before he did that, I suspect he'd want to try to get a feel for what other people at his current level are making, so he really knows a little bit about that sort of preparation. You don't want to go in…

CONAN: Like what the standard in the industry…

Mr. DELL: Yeah, what the standard was at whatever his level at that job was, but I think that's terrific that he was successful to counter their offer with a higher offer and then they accepted it. So you know when they made the first offer, they obviously had low-balled it.

CONAN: But that principle stands as to whether you're negotiating for a salary for a first baseman or for somebody, a salesman.

Mr. DELL: Absolutely - no, it does.

CONAN: All right. We're talking with Donald Dell. Let's see if we can get another caller on the line. Let's go to Steve, Steve with us from Boise.

STEVE (Caller): Hi, good afternoon. Just a comment. You know, I've done a number of deals. I'm a lawyer, and one of the axioms that I have found myself sort of living by is there are no bad deals, only bad prices, meaning that you can live with pretty much any deal points, as long as the price is right. And I'm wondering what your thoughts are on that.

Mr. DELL: Well, I think the price ends up being whatever the two parties agree on. I mean, when people say what's the value or what's the market value, I think, you know, my house is worth $5 million. The value really comes down to what you and the buyer agree on. That really establishes value.

CONAN: So it's worth whatever somebody's willing to pay for it.

Mr. DELL: Yeah, exactly.

CONAN: Steve?

STEVE: And I don't disagree, but I have found, though, that when you are at odds with respect to certain deal points, we use price as a negotiating tool, of course, meaning that you can swallow or live with just about any deal, as long as the price is right. So I agree that the price is certainly, you know, fairly negotiated, but I have used price as a means of overcoming some of those quantitative, maybe, factors of a deal that aren't as palatable.

Mr. DELL: Well, I think you're being very smart there because what you're really doing is waiving certain points in a deal that you're not so worried about and trading up for the price that you very much want, and so you're willing to accept a deal that's not perfect by your standards but that is paid well, and that's another way of negotiating and I think a very effective way.

CONAN: Steve, thanks very much for the call.

STEVE: Thank you.

CONAN: One of Donald Dell's secrets is know your audience. We like to think we know ours and that you want to hear more about how he closed some of the biggest deals in sports. Stay with us. Dealmakers, what has worked for you? What flopped? Tell us your secrets, 800-989-8255. Email us, talk@npr.org. Stay with us. I'm Neal Conan. It's the TALK OF THE NATION from NPR News.

(Soundbite of music)

CONAN: This is TALK OF THE NATION. I'm Neal Conan in Washington. Alex Rodriguez of the New York Yankees signed a 10-year deal for more than $270 million; Kobe Bryant, seven years, more than $130 million; Tiger Woods puts all of them to shame. Thanks to his endorsements and investments, he earned more than $100 million in a single year.

Behind each of those mega-deals is a shrewd negotiator, someone like Donald Dell. He founded ProServ, a company that's represented Michael Jordan, Arthur Ashe and many other star athletes. He now spills his secrets on deal-making in a new book. It's titled "Never Make the First Offer (Except When You Should)." You can find out his number one rule of power networking in an excerpt at our Web site. That's at npr.org. Click on TALK OF THE NATION.

We want to hear from dealmakers in the audience today. What's worked for you, what flopped? 800-989-8255. Email us, talk@npr.org. You can also join the conversation on our Web site at npr.org. Click on TALK OF THE NATION.

I mentioned the name of Arthur Ashe. There's a story about taking the long view, and Arthur Ashe making a tour in Africa. He's just about the number one tennis player in the world at the time and notices a young kid playing tennis in Africa and put you on to something that, well, would only ripen after a generation.

Mr. DELL: Well, it was a remarkable story. Arthur was there playing a tour in the French Cameroons, actually, with Charlie Pasarell, his roommate at UCLA, and his roommate, Charlie, was on his honeymoon with his new wife, Shareen(ph), and they were playing exhibition tennis in about five countries.

And he called me one afternoon and said, Donald, I just was playing here in the French Cameroons and I saw a ball boy who I'd seen the day before, came out to rally with me this morning, and he didn't have a tennis racket. He had sort of a huge ping-pong paddle taken out of the side of a tree, and he had no strings, and he was hitting this paddle with me. We were rallying, but he had fantastic coordination and great ability, and he was only 13, and he's French.

And so I said, well, let me call Philippe Chatrier in France, who was the president of the French Tennis Federation and was a good friend of Arthur's and mine, and Philippe said if you guys think he can play, send him over to Marseilles, we'll put him in our French tennis school, which is what they did do, and his name is Yannick Noah, who was the last person to win the French Open who is French.

CONAN: And of course he is also a father. He's now a very famous man in France beyond his tennis exploits, but his son is a well-known basketball player.

Mr. DELL: His son is Joakim Noah, who plays center for the Chicago Bulls, and about two years ago, when they won the second back-to-back tournament for Florida, the NCAAs, his dad asked if I would come back into basketball and represent his son, Joakim, which I said, sure, I'd love to, and it's been a fun experience.

CONAN: So you cast your baguette upon the waters, and it came back to you.

Mr. DELL: Well, it was awfully - that goes to my point about how it's a small industry.

CONAN: Let's go next to Mike. Mike's calling us from Cincinnati.

MIKE (Caller): Hi. I just wanted to make the point that I think that your ability to negotiate and to be able to walk away is, it's really situational. There are times when you are completely powerless, and I have a brief example of that.

CONAN: Go ahead.

MIKE: I think that's true, actually, in a lot of employment situations, but my example for me is the company that I worked for a number of years ago offered me a promotion. They had created a new position and they offered it to me. And I did research. I got six data points of people in other cities who had a comparable position, and the base salary was about 120 and they came in at 70.

(Soundbite of laughter)

MIKE: So I presented my data to them, and they said, no, we're going to offer you 70, and I mean I couldn't walk away. What could I say? No, I don't want this exciting opportunity of this new position you've created, give it to someone else? Or you know, I could say, well, I'll try to find a job like this in New York or Boston. I really was powerless in that situation, you know?

CONAN: If you had been Mike's agent, Donald Dell, what would you have done?

Mr. DELL: Well, I think Mike brings up a very good point. In a sense, when you say you're powerless, it's the same thing as saying you had no leverage. You had no way to change their offer. It was kind of a take-it-or-leave-it situation and you couldn't afford to leave it, and so you were powerless because you had no leverage.

I might suggest there might have been two or three things you could have said to them, like can we review my salary within three to six months, pick a date, six months, and if I've done X, then my salary would go up 10 percent or 20 percent or whatever the market was in that situation.

Or if they said no to that, then you might say, well, after six months or nine months I'd qualify for an additional cash bonus if I had done such and such in the line of work that you are pursuing. So that you would find out very quickly whether or not there was any room for growth, is what I'm trying to suggest.

Now, they may have said no and no and no, but at least you would know in your own mind that the 70 was the maximum they were going to ever give you.

MIKE: Right, but just by comparison, when I received my initial offer from that company, when I moved to Cincinnati to take the job, I had a simultaneous offer for this exact same job I was going to be taking with them from another company, and I had all kinds of leverage and got all kinds of perks, including a guarantee that I could take business trips to Europe and an extra bonus and things like that, so…

CONAN: Well, Mike, thanks very much for the call. I hope you've done better since.

MIKE: Thanks.

CONAN: Bye-bye. There was a moment you describe in the book where you had all of the leverage in the world, your first contract with Patrick Ewing.

Mr. DELL: Well, that was a very strange circumstance because he was drafted by the New York Knicks. They had had three or four very bad seasons.

CONAN: Very bad.

Mr. DELL: And suddenly, two weeks into it, we hadn't even begun the negotiations, the head of their public relations called up and said to me: Do you mind if we run a picture of Patrick with our season-ticket-holder brochure? We're going out to new people and we want to advertise Patrick. And I said - no, great, be my guest, put his picture everywhere. And they did, and of course that just increases your leverage.

If they're out promoting and advertising - first of all, New York City has a very tough anti-fraud-in-advertising law. So they virtually locked themselves in innocently into having to have to sign him, much more than just being the number one draft, which they felt anyway. but now they had additional pressure that they had been advertising him out in the marketplace, they had to sign him, and that gave us tremendous leverage.

CONAN: Let's talk with Mike, Mike calling from Cleveland.

MIKE (Caller): Hey, how are you guys?

CONAN: Good, thanks.

MIKE: The reason I'm calling, I'm kind of living the story here. I've got a plane sitting on the runway, and I'm about to board and fly out to Long Island and try to close a couple-million-dollar sale. But the point that I called about was specific to your gentlemen there, in that the homework and the dynamic of the individual you're dealing with, in my opinion, is the two key ingredients in most big deals. and what I found, and this is the reason I'm asking, is that with people hiding behind email and voicemail and screening these days, I find that the people, the powerbrokers today that you deal with, the people that own these places, they're much easier from a personality standpoint because they've kind of lost their way, not being able to socialize as much, speak as much, and not be able to communicate as much.

In other words, they're hiding behind all these technologies, and when you're finally in front of them, they're almost defenseless.

Mr. DELL: Well, I think the point you're making is a really valid one. Because of the email and all the impersonal, non-confrontational issues with an email or a voicemail, the number one rule, if you can, is to get in front of that person and have a face-to-face meeting, not necessarily because he's socially inept. He may be, but in point of fact, you can't read his English, his body language or his eyes or anything if you're on a telephone, or if you're, you know, exchanging emails.

So I think you're 100 percent correct. The more you can get in front of that person, to talk to him directly, is the only way you can size up a lot of the things that have to do with human nature.

MIKE: Right, but the other thing I see is that their skill sets, as far as being able to negotiate and communicate, has decreased, and that's given me better leverage than I've had in the past.

Mr. DELL: I think that's true also, but in many cases, let's say with an owner of a club who is socially inept and doesn't like to negotiate, he will throw his president or his general manager in the negotiations. That's why a lot of teams will have, quote, the president of player personnel. That's just another word for he's your chief negotiator for that team or that player or that owner.

MIKE: Correct.

CONAN: Well, Mike, good luck on the deal.

Mr. DELL: Thank you.

CONAN: Bye-bye. Let's see if we can go next to, this is Marnie, Marnie with us from Castle Rock in Colorado.

MARNIE (Caller): Hi, Neal, how are you?

CONAN: I'm well, thanks.

MARNIE: I just wanted to make a comment on how useful I think silence can be when you're negotiating. This is something I have seen my husband do a lot of times, negotiating for a car, for instance. He will say, I'm going to give you $25,000, and then he's silent, and the other person feels like they have to say something.

CONAN: Because everybody is afraid of - we use the expression in radio - dead air.

MARNIE: That's right.

CONAN: It's socially inept. Have you ever used silence, Donald?

Mr. DELL: I have only on a couple of occasions, where no one would make the first offer. I think she has a very good point though. It sends, ironically, a loud, clear message by not talking in the sense that the person you're dealing with right away is puzzled.

They either think, God, he's not talking, he's not saying a word; he must be very serious and very determined that he's going to leave it, and that may be the very kind of message you want to send, literally, by not talking.

MARNIE: I think people feel compelled to fill that space. They're uncomfortable sitting there with nothing being said, and I think they just sometimes feel like they have to say something.

CONAN: I don't mean to give away secrets, Marnie. It's occasionally useful in radio too.

(Soundbite of laughter)

MARNIE: I'm sure it is.

CONAN: Marnie, thanks very much for the call.

MARNIE: Thank you, guys, bye-bye.

CONAN: Bye-bye. Let's go next to Bob, Bob with us from Anchorage.

BOB (Caller): Thank you, Neal, fantastic show as always.

CONAN: Oh, thank you.

BOB: I wanted to ask your guest, it sounds a little bit like perhaps positional bargaining. Roger Fisher in "Getting to Yes" school, talks a lot about interest-based bargaining and value creation as opposed to claiming shares of the pie. Do you have any sense of whether that's applicable to the kind of negotiations you do?

Mr. DELL: Oh, I think definitely. A lot of it is value added. You really have to - the preparation before you sit down on a very important negotiation is critically important. You have to know the value, or at least think you know the market value of what the deal is when you sit down to negotiate. And then it comes down to whether you have the leverage or they have the leverage.

And one of the ways of finding out that initial market value is to listen to what they're saying and try to have them make the first offer, which was my initial point. If they will make the first offer, you're really learning. You're looking for information. You're not trying to win something or lose something. You're trying to study and understand their motives.

BOB: Thank you.

CONAN: Thanks, Bob. And let's see if we can go to Kerry(ph). Kerry, with us from Minneapolis.

KERRY (Caller): Hi. I have a question about negotiating contracts in which you're going to have, basically, a one-time relationship between an artist and a commissioning party.

I'm a personal assistant to composers, and I'm always trying to get them to be brave enough to ask for what they should be asking for financially. And the concern is always that, well, if I ask for too much, they'll just walk away and so I better just give them whatever. What do you think about that?

Mr. DELL: No, I think that's a very good point. Is there a way that one of these people can't say to the person, well, you know, I can play with - play for you, but what do you have in mind to pay me? And ask some leading questions to at least get some kind of initial feedback from the person you're negotiating with.

KERRY: Yeah, I mean, it's a complicating, you know, issue that most of the time, these commissioning parties are just doing this because they want to have a fun experience and the negotiating process makes it less fun when they start having to ask about money so…

CONAN: Everybody is afraid of that. Money makes it less fun. You seem to enjoy your deal-making, Donald.

Mr. DELL: Well, I do. I think, as I said, it's a study of human nature, and I enjoy and like people. And I think it's a real challenge to try to understand and maximize, for your own client, what you're trying to represent.

CONAN: Kerry, when you're talking about composers, these are people being commissioned to compose a wedding song or something like that?

KERRY: Yeah, absolutely: choral music, orchestral music. I kind of represent people who work across the gamut.

CONAN: Oh, I see. So Mr. Beethoven, try it again. We might buy your "Symphony Number 9."

(Soundbite of laughter)

Mr. DELL: But, Kerry, can't you, in that case, represent them and, thereby, negotiate on their behalf if they're shy to do it?

KERRY: Oh, yes, absolutely. And I try to, kind of, be a third party who can be a little harder on the commissioning parties when necessary so that the artists don't have to look like the bad guy.

CONAN: Well, Kerry, good luck.

KERRY: Thanks so much.

CONAN: Bye bye.

We're talking with Donald Dell about his book, "Never Make the First Offer: (Except When You Should)."

You're listening to TALK OF THE NATION from NPR News.

And Donald Dell began in life in sports as a pretty good tennis player - later captain of the U.S. Davis Cup team. But a lifelong tennis player -and I understand you were a partner of Ted Kennedy.

Mr. DELL: Well, I played some doubles with Ted just for fun in the '80s. We used to play early morning at his house with three or four other people.

CONAN: What did you learn about Senator Kennedy from the way he played?

Mr. DELL: Well, first and foremost, he loved to play and he loved to win. He was very competitive. But he was also very relaxed. He did it because he wanted the exercise early in the morning. He wanted to feel good going to work, and he really enjoyed sort of the camaraderie of the competition.

CONAN: You are a competitive guy. I mean, coming up in tennis and other things. And you like to win at your deals, too. But competition, that level of competition, can you see the - saw that he really cares about it?

Mr. DELL: Well, at certain level, you certainly can. I mean, Teddy had a good forehand. I used to tease him that he was a little slow. And when he can get to the forehand side, he would try to blast the ball pretty hard because he wanted to shorten the rallies. He didn't want to have long rallies, even in doubles, so - but he was very - and if he won, then you would have coffee or breakfast afterwards and he would ride the people. He loved to tease the people who lost.

CONAN: If he lost?

Mr. DELL: If he lost, he got rid of the lot as well.

(Soundbite of laughter)

CONAN: And he took that pretty well too?

Mr. DELL: Well, yeah. It was always a fun occasion.

CONAN: Is, in fact, when you were the president - the captain of the Davis Cup Team, non-playing captain, I should add, and a couple of your players, Arthur Ashe and Stan Smith, on that team - you got them to come out a couple of weeks early to practice together as a team and took a team - the United States team had not done well for many years - and you took them to two consecutive championships.

Mr. DELL: Well, we were lucky. We had really good talent. We lost the Davis Cup for five straight years when I took over. And I tried to make it really a mission. The first year, we had to play in six different countries and beat six different teams.

The format in the '60s was different than it is today, and so you had to play the whole world. But if you won it, then you defended it the next year and only played in the challenge round.

And we won it and beat Harry Hopman and the Australians down in Adelaide in '68. And then in '69, we defended against a really good team, the Romanians with Ion Tiriac and Ilie Nastase. And that was a very tough match, but we only had to play one as the defending champion.

CONAN: You were also, not just the captain of the team, but at that point, graduate of law school, looking to move on in your career and try to set up Arthur Ashe with an agent.

Mr. DELL: Well, it was interesting because I took Arthur to meet Mark McCormack who is a friend and he was running a company - just started a company called IMG, and he had signed Jean-Claude Killy from the Olympic skiing in '68.

CONAN: Great skier, yeah.

Mr. DELL: He had Arnold Palmer. And so I said, Arthur, you know, I think he would be the best for you. And Arthur met him two or three times. And to my shock, he said, why do you keep doing this? I don't feel comfortable with Mark. He's a little aloof. Some people think I'm a little aloof, he said.

And then he turned - we were in a cab riding on the east side in New York. And he said, why don't you do it? And I said, why don't I do what? He said, why don't you manage me? Why don't you be my lawyer and agent? And we'd have some fun and then Stan Smith would join us. I said, no, no. I'm going back to a law firm in Washington, Hogan and Hartson, where I'd been. And I said, no, I definitely want to practice law. And he said, no, no. Think about it.

And I went back and raised it with a senior partner at Hogan and Hartson. He thought it was a fantastic idea and really convinced me that there was a whole new area out there called sports law. And so, I did decide to do it and Arthur and Stan were my first two clients. And I was really originally the first person to ever manage or represent a tennis player, professionally, in the world.

CONAN: The stories of what Donald Dell has learned in that role and many other clients, including the likes of Michael Jordan and Patrick Ewing, are contained in his new book, "Never Make the First Offer: (Except When You Should) Wisdom from a Master Dealmaker." Donald Dell joined us here in Studio 3A.

Thanks so much for your time today. Appreciate it.

Mr. DELL: Thank you, Neal.

CONAN: Coming up, four years after we watched a huge storm creep toward the Gulf Coast, how did Katrina change your life? What are you doing now? 800-989-8255. Email us, talk@npr.org.

Stay with us. I'm Neal Conan. It's the TALK OF THE NATION from NPR News.

Copyright © 2009 NPR. All rights reserved. No quotes from the materials contained herein may be used in any media without attribution to NPR. This transcript is provided for personal, noncommercial use only, pursuant to our Terms of Use. Any other use requires NPR's prior permission. Visit our permissions page for further information.

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Excerpt: 'Never Make The First Offer'

Cover of 'Never Make The First Offer' i i
Cover of 'Never Make The First Offer'

In 1937 a man by the name of Dale Carnegie wrote a book entitled How to Win Friends and Influence People, which went on to become the best-selling self-help book of all time. It was intended primarily as a book on personal growth, yet more than seventy years later it remains among the top fifty titles on the business best-seller list. Why? Because all things being equal, people like to do business with their friends; and all things not being equal, people still like to do business with friends.

By "friends" I don't mean your buddies from back in high school. More often than not that can be a loaded situation. What I do mean is that there is probably nothing more fundamental to good business than building long-lasting relationships — dealing with the people you know and like and who know and like you.

One of the most well liked men in the sports business today is Under Armour's young founder, Kevin Plank. Like many "overnight" success stories, Under Armour was actually founded twelve years ago but flew under the radar for a good seven years before it really started to take off and began showing up in sporting goods stores and gyms with the same ubiquity as older, more established brands such as Nike, Adidas, and Reebok.

Today Under Armour is a $750 million company, and recently I had the opportunity to talk to Kevin over breakfast. When I asked him to what he attributed his success, he said, "Relationships. It's all about relationships — meeting people, treating them with decency and dignity, and turning them into friends."

Kevin told me how he had started his company one relationship at a time. He said he didn't have any business connections whatsoever when he was a football player at the University of Maryland. Still, his goal was to start his own business selling compression T-shirts to university athletic programs. Kevin did have a good relationship with his equipment manager, and one day he asked him whom he should talk to about his business plan.

The equipment manager said, "You should be talking to me." Most people assume that equipment managers are responsible just for washing the jocks and laying out the clothes every day, but as it turned out, this "lowly" equipment guy controlled an annual budget of $650,000! He explained to Kevin that that was how it worked throughout the Atlantic Coast Conference (ACC), and because Kevin had always treated the equipment manager with respect, he agreed to introduce him to other equipment managers from the ACC. Kevin took his performance apparel on the road, building relationships with other equipment managers and attending their annual conventions. At the conventions he would take eight to ten managers out for dinner and drinks.

Kevin had gone to high school at Fork Union Military Academy, a school known for developing football players into college and pro material. In his class alone, twenty-three players went to Division I schools, including future Heisman Trophy winner Eddie George. Of the twenty-three Division I college players, thirteen ended up turning pro. That was the beginning of Kevin's entree into professional sports.

He said he never asked any of his former classmates to plug the shirts on his behalf, but what he did do was send them free shirts and say, "Let me know what you think, and if you like them, give some to the guys in the lockers next to you." Then he'd call their equipment managers and say, "You might have seen some of your players wearing our compression T- shirts. They're superior to anything else out there, and I'd like to come

down and talk to you about them."

Today Under Armour is in contact with most of the Division I teams and professional teams throughout the National Football League, the National Basketball Association, the

National Hockey League, and Major League Baseball. It is these connections that drive the retail sales in sporting goods stores and fitness clubs, and these connections were initially built one equipment manager at a time.

Kevin told me, "When people ask me if I am surprised by the success we have achieved, I often say, 'I've always been smart enough to be naive enough to not know what I couldn't accomplish.' And what we have accomplished is directly attributable to the friends we've made and the relationships we have built and maintained."

Rule #1: Make Friends

Kevin Plank's secret isn't just that he's a nice guy. He worked at every relationship — and not just by scheduling business meetings on the road. What Kevin has done, and what I think is the most basic aspect of achieving business success, is to create opportunities to get to know people out of the office, out of the normal parameters of the business relationship, and outside mutual comfort zones. When you are away from the negotiating table, it is incredible how much people start to open up. And it's surprising how much fun you can have.

What you have to remember is to be informal, not to have an agenda, and not expect instant rewards for befriending people in your field of business. It takes time, and a friendship will only work if you're natural and consistent. It is the ultimate test in people skills. When you make friends with one or two people, a whole network of professional contacts will become apparent and available to you.

With many of my best business contacts, it actually hasn't taken a whole lot of effort to turn the relationship into something more personal, because following these rules eventually becomes second nature. The process usually begins with what I would describe as a "defining moment," some sort of shared experience (often humorous) that takes place outside the normal business comfort zone. With Horst Dassler, head of Adidas, it began with an invitation from British track star and go-between John Boulter — not to Horst's office (or to the restaurant he also owned) but to his home for dinner in Landersheim, France.

Horst lived on a magnificent seventeenth-century estate. After being treated to a delicious dinner, I retired with him and three of his business associates to another room for cognac and cigars. Horst and I had talked well into the night, when all of a sudden we realized that we were the only ones doing the talking. His three business associates, still sitting straight up in their chairs, had all fallen asleep! I guess that we two blowhards putting everyone else asleep was a defining moment in our relationship.

Adidas had been founded by Horst's father, Adi Dassler (Adi + Dassler = Adidas). Adidas was the biggest name in sports in Germany and the biggest name in soccer in the world, but Horst was fed up with sharing the company with his four sisters, so he moved to France. There he took Adidas into other sports, such as track and field and tennis; other countries, including America; and other merchandise, such as apparel (the beginning of Adidas's iconic three stripes). In five years he outgrew what remained of Adidas in Germany tenfold. Horst was the smartest sports marketer I've ever dealt with. He was also on the other end of my first company's first deal.

The first deal I ever made for ProServ was for tennis star Stan Smith. Today it seems that every superstar athlete has his or her own shoe deal, but back then it was unheard-of. The most lucrative tennis shoe licensing deal ever was Stan Smith's deal with Adidas, beginning in 1972. Shortly after my cigar and cognac night with Horst, Stan Smith won his first Wimbledon title. The very next day I received a call from Horst, who said, "I want to sign Stan Smith."

After a moment of hesitation I said, "You can't afford him."

I knew that would infuriate Horst, which it did, and make him want Stan even more, which it also did. I had already put Stan in a package deal for shoes with other American players endorsing Converse. The contracts hadn't been signed yet, but I knew that if I pulled Stan out of the package, there would be hell to pay (Converse didn't speak to me for three years), so it had to be worth it.

"Okay," I said, "but I want a five percent royalty on all Smith/Adidas shoes."

Horst went ballistic, but I knew what his goals were: Stan was his ticket into America. So after a lot of back-and-forth he eventually agreed. Neither of us knew at the time how big Adidas would become in this country, so it was sort of like dealing with play money. (Soon after this I would use the same approach in making that incredibly lucrative deal for Arthur Ashe with then-unknown Head rackets.)

Of course, making friends isn't about pulling information out of people over cognac. If you go into a dinner with that kind of goal, it will be transparent, and no one will warm up to you. Be authentic. Find commonalities between you and your soon-to-be friend. Get comfortable and sincerely enjoy yourself.

The first time I got to know Phil Knight, the founder and CEO of Nike, I completely didn't see it coming, and that's how it should always be. You can't force a friendship, just as you can't force a deal.

Both Phil and I were in Rome with our wives, Penny and Carole, for the Italian Open. On this particular day a steady light rain was falling, and by early afternoon all the matches had been canceled. Phil and I didn't know each other very well, but the four of us decided to look for a place to have lunch together. We found this perfect little cafe where we could sit outside under an awning. It was still misting, and the whole atmosphere was Italian, intimate, and very sensual.

Basically what happened is that the four of us sat there for about five hours and proceeded to get very drunk. There is nothing like a few bottles of wine "among friends" to quickly break down barriers, and by early evening I had gone from barely knowing Phil to feeling I could talk to him about almost anything. A few years later we would do what might be considered the most famous licensing deal in the history of sports: the deal with Nike for Air Jordan.

Horst Dassler and Phil Knight essentially controlled the athletic shoe business throughout the 1980s and 1990s. We would deal with their companies many times, though rarely with Horst or Phil directly. But we didn't have to. Almost everyone we dealt with at Adidas and Nike knew that I had more than a business-as-usual relationship with their boss. And in both cases I can trace back when the casual friendship began to a specific shared experience.

Excerpted from Never Make The First Offer: (Except When You Should) Wisdom From A Master Dealmaker by Donald Dell and John Boswell by arrangement with Portfolio, a member of Penguin Group (USA), Inc., Copyright (c) Donald Dell and John Boswell, 2009.

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