Answer: The parties in the Frasier negotiation are the National Broadcasting Company (NBC) and Paramount, the owner of the show. While the National Broadcasting Company (NBC) wants to pay under $5 million in order to make a profit on the show, Paramount seemed to be demanding $ 6 million per episode. Paramount came down to $5.5 million later.
Q.2. What is NBC's BATNA? What is Paramount's BATNA? What is your best estimate of their respective reservation prices? Is there a ZOPA?
Answer: NBCs BATNA: The fact that Paramount didn’t have a BATNA. If they switch networks the show would lose viewership, which will affect the studio as well as the network to which they move. So whatever NBC was offering them was the best deal they can get. And Graboff knew the CBSnetwork pretty well and was pretty sure they wouldn’t buy Frasier at such a high cost. Moreover this might kick off a price war that will ruin the networks industry and people might reconsider getting shows from paramount for their bad dealing. Paramount’s BATNA: It didn’t have one. But they were relying heavily on the fact that Frasier was the flagpole show of NBC. But if they quit NBC, both the parties will suffer, while Paramount will suffer the most. ZOPA: The ZOPA would be something that NBC had offered, the creative bonus offer based on ratings. If Paramount things their show is good enough, they must go for the bonus offer, but try and fix the slot. Slot is important because NBC might later switch slots to bring the ratings down.
Q.3. How can Value be created in this negotiation, and who is likely to get it? What obstacles might prevent agreement, and how can they be overcome?
Answer: Value: The publicity gained has already created value for both the parties, by coming to an amicable agreement, both the parties will gain. If the negotiations