What is wrong with the New York Yankees? How could they stick a great manager like Joe Torre with such a raw deal?

Stephen MacMillan, Boston

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Since we're going to take issue with your perspective in a few paragraphs, allow us to begin this column with our points of agreement.

First, we wholeheartedly agree with your view of the New York Yankees, the iconic American baseball team loved and hated in equal measure. During his 12 years as manager, Torre helped the Yankees win the World Series four times. But the team hasn't won a championship since 2000, which prompted team owner George Steinbrenner to reconsider keeping Torre when his contract came up for renewal this year. In the end, Torre opted to resign last week.

The team ownership deserves the Horse's Rear End of the Year Award for its handling of Torre's contract. Take, for instance, Steinbrenner's ugly and inhumane "Win or You're Outta Here" pronouncement in the local paper before the team's playoff series against the Cleveland Indians. Awful!

Second, we agree that Torre is a star. Who else can claim four World Series rings and 12 post-season appearances? He also happens to be a high-integrity, good-hearted, first-class human being. But did the Yankees stick Torre with a raw deal? No way. "Very reasonable" is more like it. The offer reflected the dynamics of the marketplace. With a $5m base salary, Torre would still be the highest-paid manager in baseball. And with a $1m bonus for every play-off series won, it reflected the ownership's priorities. If the Yankees won the World Series in 2008, Torre stood to receive an $8m payday, more than any other manager by a factor of two. In the cool light of day, you cannot call the deal any of the epithets it's inspired lately, from "raw" to "insulting" to "cruel".

But therein lies the problem. Torre's deal was not negotiated in the cool light of day but under the hot glare of media scrutiny. Because of that, it fell victim to an all too common dynamic in any industry, not just sports. When negotiations become public, rationality exits and emotionality sweeps in. Deals get transformed from what they should be . . . best all-around solutions . . . to Gladiator-like death matches. In the end, one side gets to proclaim victory and the other gets cast as the smote, humiliated loser.

Examples of this destructive phenomenon abound in business. It is particularly prevalent in labour negotiations, as they are almost always played out in the press. New York's contract dispute with its 34,000 transit workers in 2005, for example, was a Passion-play production of a negotiation if there ever was one. Mayor Michael Bloomberg publicly renounced the union as "thuggish" and the union leadership defied court orders. Finally, as always, the adversaries hammered out a settlement. But that only occurred after both sides had signed an agreement not to talk to the media.

But it's not just union agreements that get stung by media scrutiny. Any time an acquisition fight finds its way into the public eye, competing buyers can get a little wacky. Suddenly, it's not just about buying a company at a reasonable price.

It's about who will be declared winner and loser. The result: overpayment, sometimes to a ridiculous degree.

Similarly, media coverage can really muck up contracts for big-ticket items. Airlines, for instance, are masters of pitting companies against each other when they are in the market for a new plane purchase. The "winner" of the order may get to celebrate its big business headlines, but invariably, it then has to spend the next several years clawing back the lost margin with service and parts sales.

The point is this: Some of the least sensible deals we know of have been made because the people involved felt they had to save face before a watching world. We'd put Torre smack in the middle of that category. We respect him immensely, but it seems he let all the public attention sway his rational thinking last week, replacing it with gut-level feelings of pride and defiance. It's hard to blame him. He's only human.

From where we sit, the Yankees ownership started the media mess, with their appalling public threats and taunting.

Sadly, the Torre saga is over. But the lesson of those events should not be lost on anyone in business. When it comes to negotiations, conduct them quietly, quickly and in private . . . even if it appears to cost you more. In the end, it's worth it.