Bidding Wars
Posted On: June 8, 2018 By :FIFA recently set off controversy when, shortly before the 2026 World Cup host bid deadline, it changed the scoring system for determining the winning bid. Morocco, believing the revised system hurt its chances of winning against a joint North American bid, blasted the change.
There is a lot at play in any bid process, but some advance preparation by both the bidders and the sports properties receiving the bids can make for a more successful process. Here are some things to know:
Sports Properties
1. Make sure the bid rules are clear. This means straightforward and easy-to-understand rules about what must be submitted, when bids are due and how they will be judged. Clear rules not only make the process easier for bidders, but can also enhance the quality of bids by communicating the prerequisites and criteria for a good bid.
2. Give yourself flexibility in the process. Unexpected considerations are bound to arise, especially in bids for larger or more complex events. This makes it important to leave some wiggle room to use some degree of subjectivity and take additional factors into account beyond those explicitly listed in the bid process. But to avoid surprising bidders or the appearance of unfairness, that wiggle room should be well-
defined and stated upfront.
3. Make sure you are prepared to follow the rules you lay out. Even the best-written bid rules are useless if the sports property cannot or does not abide by them, and failure to follow the bid process can lead to legal disputes. Consider questions such as, “Are we giving ourselves enough time to review bids? Do our criteria match up with what we will actually judge bids on?”
Bidders
1. Make sure your bid is accurate. It is better to submit an accurate bid than to win the bid only to find out later that you cannot deliver on a promise.
2. Make sure you understand the rules of the game and how they might affect you. That includes understanding whether the sports property has the power to make last-minute rule changes, require additional information or take into account factors outside of the bid itself. For example, FIFA may not look kindly on public statements criticizing the process or attempts to sway the votes.
3. Know upfront what you are getting into if your bid wins. Winning the bid is the first step. But it is important to understand what happens from there. If available, it is helpful to read the terms and conditions that the winning bidder will have to agree to, and to determine whether you are comfortable with, and can meet, those terms. Major sports properties like FIFA may have terms that are very favorable to them, and enough bargaining power that they will not negotiate. It is beneficial to decide upfront whether you would sign off if you won the bid.
All in all, a better bidding process should result in better bids, and, ultimately, a more successful event.
Steven Smith serves as co-chairman of the sports and entertainment practice at Bryan Cave Leighton Paisner, in Colorado Springs, Colorado. He can be reached at steve.smith@bclplaw.com or (719) 473-3800. Associate Suzanne Crespo contributed to this article.
Posted in: Expert Advice, Perspectives