In 2001, NBC became a member of into contract discussions with Vital Television Group to keep the hit show "Frasier" round the network. Vital, the studio that produced the show, threatened to move "Frasier" to CBS, Paramount's sister network, if NBC did not pay a substantially greater license fee in comparison to 1 it absolutely was presently needing to pay. This case follows Marc Graboff's (EVP of NBC West Coast) research in to the situation.
What is Paramount's BATNA?
Since Viacom owned Paramount and CBS, Paramount had the advantage of producing Frasier A Case Solution in one of its studio and thus easily airing it on one its own station such as CBS. Paramount's BATNA was to air the show on CBS in the event that NBC did not agree to a higher licensing fee and extending Frasier A Case Analysis for an additional three (3) years.
What is your best estimate of NBC's reservation price (walk away price)? Reservation price is the price or point at which you are indifferent between doing the deal and not doing the deal. The reservation price should always reflect the BATNA. The reservation value has nothing to do what with what you hope to pay, what you "should" pay, or what is a "fair" price in the negotiation. In NBC's case, NBC's reservation price should be approximately $5.5 million dollars per episode. This represents the current break-even license fee.
What is your best estimate of Paramount's reservation price (walk away price)?
Since Mark Graboff a former lawyer and a past employee for CBS as CBS's Business Affairs, he had insight of CBS's economics. With Mark's estimation of CBS break-even license fee, the reservation price should be $3million with NBC.
Based on (c) and(d) is there a ZOPA?
Zone of possible agreement or ZOPA, is the common ground between two disputing parties. The ZOPA is critical to the successful outcome of negotiation. Based upon c and d, ZOPA existed. Paramount should be willing to take anything above $3million dollars and NBC should be willing to pay as much as 5. 5 million for Frasier Case Slideshare. Aside from ZOPA, both companies knew Frasier would be able to generate viewers that could lead into more revenue for the companies due to advertising costs they could charge advertisers for being in a prime slot with a number of hit shows on Thursday nights that subsequently attract large number of viewers.
1. Who are the parties in the Fraiser negotiation, and what are their interests? How can various parties influence the negotiation process and its outcome?
2. What is NBC's BATNA? What is Paramounts's BATNA? What is your best estimate of their respective reservation prices? Is there a ZOPA?
3. How can value be created in this negotation, and who is likely to get? What obstacles might prevent agreement, and how can they be overcome?
4. How should M arc Graboff judge success in this negotiation? As President of NBC West Coast, how would you want to compensate Graboff?