Case Study
Case Study
a. Please identify the strengths and weaknesses of each of the 4 parties.
b. Please identify the most desirable outcome of each party.
c. Please also identify the risks that each party faces.
d. Please summarise the opening statements/offers that should be made by Manchester United to Alexis and to Arsenal.
1000 words
1. Alexis is 29 years of age. He has played senior level football since he was 17 years of age. He joined Arsenal from Barcelona 3 years ago and has been their best player every year since then. His current package with bonus is £200k per week. He has 18 months left on his contract. He wants to join a club that will win trophies and compete in the European Champions League. He is concerned that Arsenal are not ambitious and will not challenge for honours in the near future because they have sold most of their top players over the last 5 years.
His children are in primary school in London. Alexis loves England and would like to move into team management when his career is over.
In the last couple of months he has found that his legs have become a bit tired after matches and it is now taking him a bit longer to recover from games and injuries.
He has told his agent that he wants to leave Arsenal in January. He wants to be transferred to one of the big English clubs that dominate the Premier league. He was distraught when last summer his planned £70m transfer to Manchester City fell apart at the last minute, after he had agreed terms with Man City.
2. Arsenal are one of the biggest clubs in the country. However they have not won the Premier league for 10 years. They have traded many of their best players over the last 5 years so as to minimise costs and pay for their new stadium. They want to retain Alexis as he is their only player who is truly world class. He is the fan’s favourite although some fans have become concerned at the way in which Alexis has shown his frustration in recent months when the team has failed to win games.
In normal times, Alexis is worth c£70m on the open market. However, with his contract due to expire in 18 months his value on a sale is c£25m.
At the end of his contract he is entitled to leave the club for free, with the club not being entitled to receive any compensation/transfer fee at that time. At this time he will be able to negotiate his own deal with any club that wants him to join them.
Last summer Arsenal had agreed to sell Alexis to Manchester City for £70m but the deal fell apart at the last minute when Arsenal had not been able to secure his replacement.
They would prefer not to sell one of their best players to one of their main rivals and they want to ensure that they finish in the top 4 so as to ensure qualification for next year’s Champions League. Arsenal are also aware that they have a number of other leading players whose contracts are due to expire in the next 18 or 24 months. Historically they have created and applied a strict wage structure. Alexis is their highest earning player.
Arsenal are aware of Manchester United’s interest in Alexis. Arsenal have a very high regard for Henrik Mikhitaryan who has been at Manchester United for 2 years but has been out of favour for 3 months. They would insist on Henrik’s transfer to Arsenal as part of any deal involving Alexis.
3. Manchester United are the biggest club in the world. They have not done well in the last 4 years since Sir Alex Ferguson retired as manager after having been in charge for 26 years. The current manager has identified Alexis Sanchez as a key element in the side he is trying to build. The manager plans to play Sanchez on the left side of attack, a position currently occupied by a young player developed at the club over 8 years. He wants to buy Alexis in this January transfer window so that Alexis can help the team for the rest of the season. Manchester United has a reputation for developing young players.
The manager bought Henrik for Manchester United 2 years ago but has decided that Henrik is not the player he wants at the club. He is aware that Arsenal could be interested in signing Henrik. His market value is c£25m.
4. Henrik had a very successful career in Germany before joining Manchester United 2 years ago. His relationship with the manager has now completely broken down. He has been publicly humiliated by the manager and he is anxious to leave the club as soon as possible. He recalls that Arsenal had tried to buy him at the time he went to Manchester United 2 years ago. He has told his agent that he wants to leave Manchester in January. He has over 2 years left on his contract. His current wage is £100k per week.
It is now the start of January. The transfer window closes at the end of January so if a deal involving these parties is to be completed, it must be finalised before the end of this month.
Questions to be addressed;
Please assess the position of the 4 parties. Specifically;
a. Please identify the strengths and weaknesses of each of the 4 parties.
b. Please identify the most desirable outcome of each party.
c. Please also identify the risks that each party faces.
d. Please summarise the opening statements/offers that should be made by Manchester United to Alexis and to Arsenal.
4 way negotiation. Timescales. Power. Risk analysis.
(1,000 words)
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