Negotiation in Entertainment

Negotiation is a vital part of the entertainment business.  Whether you’re a grip, an actor, an agent, or the head of a network or studio chances are you will find yourself negotiating at some point along your professional journey. 

I recently had the opportunity to interview Fred Shaheen who is the Vice President of Acquisitions at family entertainment cable network, INSP.  Shaheen is a television industry veteran with a career that has taken him from Ohio to Los Angeles back to Ohio and finally to the east coast in the Charlotte, North Carolina area where he currently resides.  He has produced such shows as the original People’s Court, Press Your Luck, ABC’s Home Show (that eventually got replaced by The View), and HGTV’s Room by Room.  Now, as the VP of Acquisitions for INSP he finds himself constantly in the middle of negotiations with major distributors for content.  For this reason I decided to get his input on the negotiation process.

Q:  Positional Bargaining is basically defined as haggling.  It’s arguing over positions only, not interests and it involves holding on to a fixed idea or position while How do you utilize positional bargaining in your negotiations to acquire content?

A: Yes!  First I research, that is a large part of what I do- researching to find what shows we want for the network, about how much they cost, sometimes I even check with other networks to get a good idea on pricing.  

Once we’ve decided that we want to pull the trigger on a show, we’ve done our due diligence and we know it will be good on our network and about what we want to pay for it I start off by making a phone call to the distributor.  Because our deals are multifaceted depending on exclusivity (full exclusivity means that no other network can air the content purchased during the entire term of the contract, partial exclusivity can be for a certain time period during the contract or that only one other network can air the content during the contract) and number of telecasts (runs on the network during the contract).  Both of these factors contribute to the overall price.  The first thing I do is make the distributor give me a price first to start negotiations.  If I have to go first I will present a number lower than what I think it is.  After the initial phone call I will send my terms in writing via email, which is a common request.  I will have this email ready before I make the phone call so I can get it to them right away.

Q: Are you ever in a position to use a BATNA or Best Alternative to a Negotiated Agreement?   In your situation this question would translate as do you have a back-up plan should you not be able to reach an agreement with the distributor?

A: That’s one thing I wish we did differently in our acquisitions process.  What generally happens is we do our research and we identify a specific show we want and I start negotiations.  We never have a back-up title where I can say in a negotiation, “This is my bottom line either meet it or I’ll go elsewhere.” 

Because of this I lack positioning power when I go in to negotiate for content.  So I at this point I don’t have a best alternative but we’re working towards it.

Q: In your negotiations for content have you ever come across the use of dirty tricks on the part of distributors?

A: Yes! Yes, definitely.  I’ve noticed some schemes with one distributor in particular.  Without naming any names it’s known throughout the industry how this certain distributor conducts business. 

Q: How do you deal with them when they use tactics like dirty tricks?

A: I’m definitely more skeptical.  In addition to doing my research and getting everything in writing like normal I will be sure to check and recheck every correspondence to make sure none of the terms have changed.  I also have to gear up mentally to interact with them.

Q: In difficult negotiations, such as ones where the distributor is using dirty tricks, do you find it difficult to separate the people from the problem?

A: It is.  I mean the person that I work with is great and probably very nice but she is the mouthpiece of the company she represents in the negotiation. 

I know she’s only doing what she’s told and at a different place she probably wouldn’t act the same but in this case she represents the company I’m negotiating with and I can’t view her individually apart from that.

Q: How did you learn how to negotiate, specifically for the position you’re currently working?

A: I’ve been negotiating my entire television life.  As a producer I would negotiate for crew, with hotels for a good price to put up my host.  I feel like up to now God has been preparing me for this position.  I like negotiating; my father was in broadcast sales.  I negotiate as part of my everyday life- for cars, for services.  Why pay more if you don’t have to?  You’ve got to be up for the game and plan ahead.