“When somebody says it’s not about the money, it’s about the money,” noted writer H.L. Mencken and others. This applies in many negotiations. But not always.
In fact, this has not been true for the third highest compensated college basketball coach in the U.S. According to USA Today, “Michigan State’s basketball maverick: How Tom Izzo has prospered on his terms for 30 years,” Izzo told them “I’ve never negotiated a contract. Ever.” And he has never had an agent.
What is going on? How has this Naismith Basketball Hall of Fame coach, who led Michigan State to one NCAA national championship and eight Final Four appearances, achieved so much without engaging in the back-and-forth process we generally describe as “negotiating”?
Without quibbling over what to call his approach (I consider it a form of negotiating), there are three keys to his and Michigan State’s negotiation success.
1. Relationships Trumped Money
Izzo knows he has left money on the table – and is perfectly fine with this. As he noted in the article, “I think, in this day and age, could I have made more money? Sure. Could I have made more money by leaving? Sure. But I’m also a relationship-based guy over a transaction-based guy. And I had good relationships.”
It’s no coincidence that former Michigan State athletics director Mark Hollis – who negotiated many of those contracts with Izzo – was Izzo’s college roommate and Izzo was the best man at Hollis’ wedding.
2. Michigan State Proactively Gave Him “Fair” Market-Based Compensation
Izzo told USA Today “I don’t want to sound like I’m some great guy that just said, ‘I don’t care about the money.’ Everybody cares about the money. I just had faith that my people would treat me fairly.”
And Michigan State consciously treated him extremely fairly, financially and otherwise. USA Today estimates that Michigan State paid him at least $93 million in his 29 years there and since 2006-07 estimates Izzo has never ranked lower than seventh in compensation of U.S. men’s basketball coaches.
Michigan State’s 1993-2004 President Peter McPherson, who handled Izzo’s contract for years, told USA Today he “made a conscious effort to stay ahead of the market” and noted that Izzo “had a pretty good idea of what other people were making and some of the considerations.”
3. Both Parties Treated the Other Professionally and with Transparency
Shortly after Michigan State won the national championship in 2000, the NBA’s Atlanta Hawks reportedly offered him $3 million a year to become its head coach. Izzo was then making around $1 million a year.
Izzo told USA Today that he “liked where I was at. I liked the way I was treated. I felt like they appreciated me, and I appreciated them.”
Plus, as Hollis recalled, Izzo brought an “unusual transparency” to the table relating to his other offers. This included “Izzo inviting Hollis to sit in on phone conversations with NBA owners about potential job offers and salary details.”
The transparency was also mutual, with Michigan State openly sharing its broader athletic department’s goals with Izzo and, effectively, making Izzo the face of the university.
Latz’s Lesson: It’s really not always about the money – sometimes it’s more about strong relationships and being treated fairly, professionally and with significant transparency.
* Marty Latz is the founder of Latz Negotiation, a national negotiation training and consulting company that helps individuals and organizations achieve better results with best practices based on the experts’ research. He can be reached at 480.951.3222 or Marty@LatzNegotiation.com.