Tag Archives: business affairs

Negotiation Culture Redux: Lying Makes Sammy Run

There’s nothing new about lying during negotiations. Almost sixty years ago, Budd Schulberg wrote What Makes Sammy Run, a novel about an agent who lies to get ahead in the movie business. There have been a number of other works published or produced on the subject as well. More recently, I wrote about it here.

Then as now, negotiating is nothing less than a confrontational (and largely, animal instinct-driven) struggle for limited resources. There’s only so much pie to go around and a rep wants the client’s slice to be as big as possible; not just for the deal on the table but to set precedent or the quote for other deals down the road. These precedents greatly influence, if not become the floor to subsequent negotiations, taking into account the project’s budget and vintage of the quote. Agents, managers and sometimes, lawyers have an added incentive since their fees are based on a percentage of what the client makes on a particular project.

It’s only natural then that some reps feel that they have an absolute obligation to their clients (and to their law firms or agencies) to maximize their slice-to-total-pie ratio even if it means lying to the other side about a material term.

I suspect it was that desire that recklessly drove one particular rep to repeatedly lie to me about his client’s quote during negotiations; the first time by more than double the actual quote.

The rep stalled over days when I asked for documentary backup to the quote (a pro forma request usually provided on demand or verbally confirmed by the studio or network business affairs exec who initially put the quoted deal together). And when the days of stalling turned into weeks, I suspected the worst and only pressed harder. He ultimately confessed that he had misquoted the figure and that his client’s quote was really [a number that was about a third more than the actual figure].

I was furious. When I insisted on seeing the prior deal, the rep had the gall to blame me for drawing negotiations out.

The rep’s actions were particularly dumb since a quote is one of the easiest things to verify. When I told the story to R, a manager, former agent and friend, he laughed and said cynically, “he should have only lied to you about things you couldn’t check.”

Ultimately, the debacle left my client with substantially more leverage and the moral high ground to close the deal on more favorable terms.

“So why am I still angry?” I asked.

“Because you caught him lying and had to do something about it.” R said.

This business is based on trusted relationships meticulously built over time. Like deals drafted on a napkin over lunch back in the day, a rep’s integrity and reputation can still go a long way to closing deals faster and on better terms today.

In contrast, lying makes deal making harder; can polarize the parties; and makes the negotiations feel more like protracted litigation. Lying can kill a deal and, even in the best of outcomes, slow things down.

In this instance, we were lucky. The rep’s lies (not to mention the endless delays caused by his stalling) ended up costing our clients only time and money. It cost the rep much, much more.

The Bluffer

 

 

 

 

 

 

 

In the early 90′s, I occasionally played in a monthly poker game. The regulars were all guys; mostly lawyers; mostly working in the entertainment business. One of the regulars was a guy named Joey DeMarco.

Joey was working in business affairs at Fox (and later, Fox Searchlight) and was a rising star at the studio. Although the location varied, I seemed to play most often when he hosted the game. Joey lived in a large house on Stone Canyon near the Bel Air Hotel. Despite the impressive zip code, the decor was decidedly single straight guy with a set of weights and a bench press prominently on display in the living room of the 1940′s ranch house.

The vibe was more “Lord Of The Flies” than a friendly game of poker and on the nights in which I played, Joey dominated if not controlled the game. He clearly knew the odds of each hand and usually did quite well against the rest of us. Joey often had the cards to beat; and when he didn’t, he was quite good at bluffing. Even when you were sure he didn’t have the cards, you dare not call him on the bluff. He was so good at it, that you usually doubted your own judgment.

I negotiated against Joey only once and it was years after I stopped playing in the game. Given past experience, I braced for what I thought was going to be an aggressive negotiation with a formidable alpha-male. He surprised me by being straightforward and fair from the very start. Joey didn’t try to dominate or bluster through the open points and we “got the deal done” in short order. Later, I learned that the tone of his negotiations was more the rule for him than the exception.

Joey died two weeks ago at the age of 48. Although it’s doubtful that I will ever be as skilled a poker player, I will aspire to be just as good a negotiator as he was. Joey epitomized skilled negotiating without the need for hostility or dominance. For him, the best negotiating didn’t need to feel like negotiating at all and it was OK if everybody left feeling like a winner.

Still, every good negotiator needs to be prepared for any contingency. I missed the funeral but was told that his poker buddies placed four playing cards in his grave: an ace-king suited for high hand and a deuce-seven for the bluff. Just in case.

Money For Nuthin’ or Nick’s For Free

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AFTRA accused Nickelodeon of improperly negotiating talent revenue participation for the cable outlet outside of Nick’s shows. A copy of AFTRA’s purported letter to Nick (I couldn’t verify its authenticity) is here.

More specifically, AFTRA’s letter asserts that Nick requires “that the performer grant to the employer a right to a ‘profit participation’ interest in the talent’s third-party income as a condition of employment” in violation of AFTRA’s collective bargaining agreement and possibly California law.

I don’t think that AFTRA has a leg to stand on or they would have cited the applicable provisions of their agreement and the law chapter and verse. I suspect that Nick’s lawyers came to the same conclusion.

What is clear is that the major studios, networks and cable outlets are looking for the next Martha Stewart or, in Nick’s case, their answer to the Disney Channel’s “Hannah Montana”; building brands on the backs of the talent they break with the goal of cashing in on their success essentially forever.

While it’s difficult to empathize with the big entertainment companies, production costs are rising and viewership is more fragmented. As a result, they’re on a desperate search for new revenue streams.

I posted about this emerging deal point several months ago when the Food Network started asking for similar language in their talent agreements. With Nick now taking up the cause, a trend has developed and it won’t be long before the rest follow suit.

What was once an unreasonable “ask,” will become – if it isn’t already – business affairs policy unless talent reps develop the leverage to collectively reject it. However, with the potential millions to be made by breaking the next Miley Cyrus and a surplus of talented kids (and their parents) hoping to make it big, I doubt that’s possible.