1.) Position: Tyler wants to sell the series Mom.com
Interest: Due to overall sales for Hollyville being below projections and Terry’s personal performance evalution being based year-end booked sales it is critical for him to make a sale.
2.) Position: No more than 8 runs, no financing deal beyond 3 years and upfront payment of around 50%.
3.) Interest: Do not breach any company implemented restrictions and try to be very close to company practice in regards to terms.
5.) Position: He wants to have a good relationship with WCHI Interest: Tyler wants to keep a good relationship, as there most certainly will be other points of contacts for sales in the future with WCHI.
1.) Position: Be the independent television station that shows Moms.com Interest: It is interested in improving its audience demographics, and the target audience of the series Moms.com is the most attractive one for advertisers. Getting this audience might be possible to keep a least part of this group longer-term. Especially as WILL for example focusses on men.
2.) Position: Regain audience leadershipe
3.) Position: Have strong new programs and avoiding competitor getting such programs Interest:
4.) Position: Do not overpay Moms
Interest: According to the information given WCHI is in a financially stable position again, so while price is always important it might be not as critical as the other points. In addition as WCHI needs strong programs and Hollyville is one of the Top 7 providers it is interested in keeping a good relationship.
Assuming that my estimation of the demographic rating 5-6 is probably a bit too optimistic or at the least the buyer will be for safety reasons be a bit more conservative, I expect that he predicts the range to be in the 4-5 range. Based on this and the given numbers his revenue should be around 9 Mio.. Subtracting the costs of Moms.com TARGET/
As by the attached calculation, my target would be to reach:
Licence price of 60.000
Have the amounts of run limited to 5
Financing of 50% upfront, 25% year 1 and 25% year 2.
My aim is to keep junior, however if necessary by my contingency plan I will create a bundled deal of Moms and Junior if necessary and the total outcome (based on Junior bringing in an additional 1.000.000) would be similar to my target without Junior. Target of paying not more than
Try to create a package including another TV series and programme and get a rebate for the bundle of two programmes. WHAT IS YOUR OPENING MOVE? INITIAL STRATEGYAND CONTINGENCY PLANS:
My opening move will be to start with a very positive note and by trying to formulate my first offer sort as a favoru.
We would be very delightful in working together as partners with WCHI, building a long-term relationship. With great pleasure I could offer him the very successful series Moms.com a year earlier than anticipated.
Overall on paper at least the situation looks like both parties have in certain areas slightly different needs and by finding trade-offs could increase the value for both.
The initial strategy would be to continue to built trust, to gather information, to give in exchange information and to ask questions. It will be critical to find out which of the points to discuss are very critical for him, especially points I have strict company limits. As the amount of runs is an important point of Hollyville it will be important to find out how critical it is for WCHI and what he had in mind. My focus will be to understand if for WCHI a repetition of the series above 6 is critical and regards any value for him. Of course using series more often reduces costs, however at some stage there will be a trade-off as at least part of the audience will get bored of the repetition and will switch to other stations.
I have prepared for the first three rounds for each round three bundles which differentiate (higher price but better financing conditions and more runs) in different points slightly which however in total cost roughly the same to find out his preferences. With that information I can propose new deals during the negotiation reducing the total price from being very high at the start round by round a bit.
As by the situation of Hollyville needs to have future sale which lots of competition ( and WCHI being interested in
The lucrative business is to to sell to independeant but only 4 there,
Make multiple offers simultaneously
Effective negotiators look for opportunities to create value by making trades across multiple issues
Try to sell the bundle of Juniors and Moms.com to WCHI for at least
Try to decide on a bonus/ discount if the rating of the audience is higher or lower than expected after each year
Without putting under pressure making him understand that there are of course other potential buyers
I would then make a few proposals with are all a bit higher. I will explain my pricing by telling him that the following points would justify this higher price: Moms achieved a 20 rating and 30 share in prime time, the series targets the demographic group with the highest advertising rates, making it idea for the for independent stations so important 6:00pm slot. In addition, as he would know, first-run network television programs typically incur a 20% loss.
need to exchange information about their preferences and priorities.
One of the critical discussion points I expect to be, is the different assessment of the rating within the primary demographic category as this is what defines the revenue and therefor the value for the buyer which ultimately influences his maximal acceptable pricing. As the difference on the revenue of being in the group 5-6 or only one below is pretty substantial, my idea would be in case we stuck there to finalize a deal and its pricing where we agree on assuimg the series will be in on or the other rating group.
We will then fix in our deal that after the first year we will check in which rating group the series ended up. Depending on the decided rating group and outcome the buyer would receive a discount in case the real rating group was below the expected one or would need to pay a bonus in case it was above the expected rating group.
If the negotiations get stuck, I will explain Kim that of course there is concrete interest by competitors for the series (without telling any concrete numbers). However we had Hollyville would be very interested in finding in working together. I would then offer a deal including Junior in the package. It is not the most profitable product for us but will make the overall deal more attractive for WCHI. Try to sell the bundle of Juniors and Moms.com to WCHI for at least Try to decide on a bonus/ discount if the rating of the audience is higher or lower than expected after each year.
Courtney from Study Moose
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