There is also a strategy called the stalking horse bid that is used to prevent low value bids on assets that belong to distressed companies, typically companies in bankruptcy. The stalking horse bidder will usually be given some incentives to take the risk of putting a fair market bid on the assets, regardless of if they end up being the high bid or not.
Imagine if Disney was considering putting a poor performing division out on the market for sale. Now imagine that the Ergens have agreed to put the initial bid for ESPN at a fair market value as long as Disney agrees to shed some of ESPNs expenses in the form of expensive headcount.
Of course this is all imagination land ish, but now Gruden is finding himself needing a new gig. The Ergens, through a VC, make a deal with the Grude that says that if UT HC position comes available and offered to him then he will sign.