Theory and Practice of Negotiations
In 2001 negotiations began with NBC and Paramount in order to keep the hit TV Frasier on NBC’s network. Paramount, the studio that produced the show, threatened to move "Frasier" to CBS, Paramount's sister network, if NBC did not agree to a substantially higher license fee than the one it was currently paying. Both had competing interests and several factors were taken into consideration before the negotiations began. Paramount and Kelsey Grammer (Frasier), who the show was centered around, had personal interest. Both wanted a 3 year extension so that Kelsey could rank in history. Kelsey wanted to be an actor with having a 20 consecutive run in television for the record of longest‐running primetime television character in TV. Without Kelsey (Fraiser), Paramount and NBC would not have a series. NBC however, did not see Frasier has having an additional 3 years of life and did not want to invest in another 3 years. They also deemed Paramount’s price per episode as too high and wanted to minimize the loss of revenue.
What is NBC BATNA?
BATNA stands for “Best Alternative To a Negotiated Agreement”. In other words BATNA means what do you do if you do not reach a deal? I believe NBC’s BATNA was to buy a comedy show such as Dharma & Greg from another network such as ABC. NBC was looking or considering a comedy show that would give NBC the same size viewing audience that Frasier was drawing. If this was to happen, NBC knew that this would cause a bidding war among networks for top TV programs, subsequently networks vying for each other programs and cause an increase in programming cost for all networks. Inasmuch, NBC understood that they were the only network left without a partner in the movie business unlike ABC & CBS that had consolidated with the entertainment and media industry which left them more vulnerable and risky when trying to compete in the bidding war game.
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