Tag Archives: Negotiations

Patching Up Negotiations Redux

[Ed. Note: This is a reprint of my 10/31/09 post.] Last year, procrastination got the best of me and by the time I got around to the annual pumpkin purchase on October 30th, the supermarkets were out of all but the most damaged pumpkins. I was left with no alternative than to deal with the local Pumpkin Patch Guy (a/k/a the Christmas Tree Lot Guy).

Some might say I was merely on the wrong side of supply and demand. But sitting on his throne of hay bales, Pumpkin Patch Guy went beyond aggressive deal making. He was ripping me off.

I should of walked away but it was late and the kids were tired. Feeling like a rube, I pulled out my wallet and gave him forty bucks for a couple of sad looking pumpkins plus another ten for the carving kit. This year, I got smart and didn’t go back. I planned ahead and procured my pumpkins at a substantial discount.

Like Pumpkin Patch Guy, a rep has a fiduciary duty to maximize value. But does that always result in doing what’s best for the client? Maybe so if it’s about short term value (it’s about the upfront money, stupid!).

But what about over the long term? Pumpkin Patch Guy lost me as a repeat customer by gouging me simply because he could.

Effective negotiation and deal making often require more than selling to the highest bidder. In many cases, the parties involved have to be able to work together over the long haul (e.g., SAG and the AMPTP).

Good will and occasional restraint by the stronger party can go a long way to salve the pain of accepting unpopular deal points by the weaker player. You’re not looking for a love fest here; merely a path towards building trust over subsequent negotiations.

Pumpkin Patch Guy might have earned my continued business if he’d thrown in the carving kit or a coupon for future discounts; something, anything to make me feel better about being gouged. SAG and the studios might have been able to change the discordant tone of their negotiations by simply finding more common ground through the exchange of ego nickels. Now, months after SAG sealed its deal with the studios, there continues to be profound polarization between the two camps and their supporters.

Does negotiating an arguably more fair deal really create momentum and good will for the next or does it betray weakness in your position? Does aggressive negotiation help, hinder or have no effect on the next deal? Whatever your approach, it pays to consider whose ox is ultimately getting gourd.

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[Update: Whether it was the recession or bad business practices, Pumpkin Patch Guy was replaced by Pumpkin Patch Guy 2.0.
This year's pumpkin purchase went without a hitch.
They even threw in the carving kit!]

Patching Up Negotiations

Last year, procrastination got the best of me and by the time I got around to the annual pumpkin purchase on October 30th, the supermarkets were out of all but the most damaged pumpkins. I was left with no alternative than to deal with the local Pumpkin Patch Guy (a/k/a the Christmas Tree Lot Guy).

Some might say I was merely on the wrong side of supply and demand. But sitting on his throne of hay bales, Pumpkin Patch Guy went beyond aggressive deal making. He was ripping me off.

I should of walked away but it was late and the kids were tired. Feeling like a rube, I pulled out my wallet and gave him forty bucks for a couple of sad looking pumpkins plus another ten for the carving kit. This year, I got smart and didn’t go back. I planned ahead and procured my pumpkins at a substantial discount.

Like Pumpkin Patch Guy, a rep has a fiduciary duty to maximize value. But does that always result in doing what’s best for the client? Maybe so if it’s about short term value (it’s about the upfront money, stupid!).

But what about over the long term? Pumpkin Patch Guy lost me as a repeat customer by gouging me simply because he could.

Effective negotiation and deal making often require more than selling to the highest bidder. In many cases, the parties involved have to be able to work together over the long haul (e.g., SAG and the AMPTP).

Good will and occasional restraint by the stronger party can go a long way to salve the pain of accepting unpopular deal points by the weaker player. You’re not looking for a love fest here; merely a path towards building trust over subsequent negotiations.

Pumpkin Patch Guy might have earned my continued business if he’d thrown in the carving kit or a coupon for future discounts; something, anything to make me feel better about being gouged. SAG and the studios might have been able to change the discordant tone of their negotiations by simply finding more common ground through the exchange of ego nickels. Now, months after SAG sealed its deal with the studios, there continues to be profound polarization between the two camps and their supporters.

Does negotiating an arguably more fair deal really create momentum and good will for the next or does it betray weakness in your position? Does aggressive negotiation help, hinder or have no effect on the next deal? Whatever your approach, it pays to consider whose ox is ultimately getting gourd.

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.