Microkhan by Brendan I. Koerner

Optimal Ransom

June 20th, 2012 · 6 Comments

When Nigerian soccer star Christian Obodo was briefly kidnapped earlier this month, I was struck not only by the boldness of the crime, but also by the crooks’ obvious sensitivity to economic realities. For as this early account of the caper makes clear, the kidnappers and Obodo’s family started the negotiations on more-or-less the same page:

Obodo’s brother, Kenneth Obodo, who is also a footballer in Italy and is currently in Nigeria, was quoted by Italian news agency ANSA as saying: “Christian is fine. We are in touch with the kidnappers, who want some money.

“We can’t give them more than 100,000 euros ($125,000). Unfortunately these things happen in our country.”

His brother-in-law, Obidike Okechukwu, was quoted by ANSA as saying that the kidnappers had asked for a ransom of 150,000 euros.

In other words, the initial ransom demand and the family’s upper limit were just 50,000 euros apart. Which makes me wonder: Is there a basic formula that kidnappers can employ to determine tolerable ransoms? Is it a certain percentage of a victim’s net worth or annual income? And did they do research on Obodo’s salary with Udinese, his club in Italy’s Serie A, to figure out a ballpark figure to charge his relatives?

The average salary of a Serie A player is 5 million euros, though Obodo, who was on loan to Lecce this past season, certainly makes far less. Safe to say that the kidnappers quoted a opening ransom equivalent to 15-20 percent of annual gross income, with an toward settling for 10 percent? Sports agents typically take 15 percent, after all, so perhaps kidnappers feel that is a good place to start—a cut that is neither insignificant nor back-breaking.

If only all negotiations could open with such little disparity between the conflicting parties: In today’s dispute over Port Moresby’s entire water supply, the sides’ proposed “ransoms” are off by approximately $140 million. That should be a fun negotiation.

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