Felix Martinez
Negotiation
Professor Dr. Richard Dool
Summer 2019
08/04/19
Negotiation Prep and Analysis
CONTENT
1. Moms.com
2. Bullard
3. Virtual Victorian
Case: Moms. com
Negotiation Type: Integrative tactics
ROLE: KIM TAYLOR Agent from WCHI
Overview
Different Priorities from Two Parties:
1. Kim Taylor (WCHI):
– Expected advertising revenue from the Moms.com Show should be at a base
of $8.4 million
– Minimize the licensing fee of the Moms show, which should be staying at the
range of 30,000 – 60,000/ episode, 100 episodes in all
– Negotiate the payment terms: ideally, it could be evenly paid across the five
years
– The value of alternative deal:
o to purchase another show at an expected price of 20,000/episode, 100
episode
o the time slot of the Moms show -> 6 pm to target primary demographic
owning higher rating of the show (24-54 years old women)
o to purchase another show from another producer, which would be
more compatible with achieving next time-slot audience flow and only
cost my company $3, 000, 000 (100 episodes* 30,000/episode)
2. Terry Schiller (Hollyville):
– To sell the Moms show and maximize its net value of the contract
o Maximize the licensing fee
o Shorten the payment terms
o Negotiate another purchase of the show named Juniors, which targets
the teenage market segment owning the lowest advertising rates
Analysis
Critical Factors for Negotiation:
To complete a negotiation with Terry based on below agreed-upon items:
The agreement on the licensing fee of the Moms Show
The arrangement of the expected advertising revenue of the show
The payment will be evenly paid off across the five years
The other alternative will be based on the above primary three
agreements
Strategies & Target Point:
The estimate of the net advertising revenue from the show:
The cost of the licensing fee:
o Board team will not approve the price more than $60,000/episode
o The show will never sell at a price below $30,000/episode
The runs of the episode: the optimal number would be 8 runs/episode (adding
$1,600, 000), but 7 runs/ episode is acceptable (adding $ 800,000)
o The timeslot should be determined at 6 pm each evening
The expected value of the advertising revenue of this show should be ranged
from $8.4 million to $10 million (8 runs per episode)
Payment terms: across the five years, can be evenly paid at a 20% of licensing
fee/ year -> total payment saving would be $900,000
Synthesis
Learning Starting Point/Initial Offer and Concessions:
Understand the expectation of the Terry (his first priority and issues)
Giving the hardball to sense Terry’s bottom line
Adjust the negotiation tactic based on the above information
Initial offer:
o Zero “Payment up front”
