Case Study

Case Study Analysis Part A

LTA

MGT 445

August 9, 2012

Sukjinn (Sue) Caruthers

Case Study Analysis Part A

The “Power Play for Howard” illustrates the high-staked extensive negotiation course for a new contract as well as a competitive salary for Juwan Howard, who was an all-star free agent who played forward for the Washington Bullets. The process of the negotiation will be fully discussed in detail as well as, evaluate the tangible and intangible benefits, and evaluate the costs and risks in the course of the viewpoints of Juwan and the general managers of the Miami Heat and Washington Bullets. The conclusion of the agreement with Howard is one of the most rewarding free-agent signings in the entire history of the National Basketball Association (NBA).

Jawan Howard was a professional basketball player who played for the Bullets. When his contract with them ended, he wanted to negotiate with them for a new contract. He enjoyed playing for the bulls but he wanted to have a higher salary. He wanted the Bulls to pay him over a $100 million, but they would not agree to this price. The Heat offered him the sum he wanted plus many other perks, such as limos and executive suites, and he decided to join their team. However, after he signed the contract with them, the NBA decided to investigate this contract. They suspected that the Heat may have broken league rules to give him such a high salary.

In order to keep the system fair, each team is given a limit with the amount of money they are allowed to use for salary. In order to give Jawan Howard such a high salary, the Heat did many things that the league decided were illegal according to their rules. When the Heat was forced to make the changes to the contracts of the other players, they were no longer able to honor the contract they had with Howard. This meant that Howard was a free agent again. By this time, the Bullets had acquired many players who had good...