Frasier Case Analysis - Group 2 Section A

Rudraditya Bhattacharya

Sonia Singh

Saumya Garg

Vanyasree Paila

Priyajeet Singh

Rahul Kanvinde

Charuvagun S

Q.1. Who are the parties in the Frasier negotiation, what are their interests? How can the various parties influence the negotiation process and its outcome? Answer: The parties in the Frasier negotiation are the National Broadcasting Company (NBC) and Paramount, the owner of the show. While the National Broadcasting Company (NBC) wants to pay under $5 million in order to make a profit on the show, Paramount seemed to be demanding $ 6 million per episode. Paramount came down to $5.5 million later.

Q.2. What is NBC's BATNA? What is Paramount's BATNA? What is your best estimate of their respective reservation prices? Is there a ZOPA? Answer: NBC͛s BATNA: The fact that Paramount didn͛t have a BATNA. If they switch networks the show would lose viewership, which will affect the studio as well as the network to which they move. So whatever NBC was offering them was the best deal they can get. And Graboff knew the CBS network pretty well and was pretty sure they wouldn͛t buy ͚Frasier͛ at such a high cost. Moreover this might kick off a price war that will ruin the networks industry and people might reconsider getting shows from paramount for their bad dealing. Paramount͛s BATNA: It didn͛t have one. But they were relying heavily on the fact that ͚Frasier͛ was the flagpole show of NBC. But if they quit NBC, both the parties will suffer, while Paramount will suffer the most. ZOPA: The ZOPA would be something that NBC had offered, the creative bonus offer based on ratings. If Paramount things their show is good enough, they must go for the bonus offer, but try and fix the slot. Slot is important because NBC might later switch slots to bring the ratings down.

1|P a g e

Grammet Productions and Grub Street productions. The major attraction from Frasier was its "tent pole" effect which ensured that programmes shown around it also received high viewership. After much haggling. 2|P a g e . He employed a number of successful techniques: I. and how can they be overcome? Answer: Value: The publicity gained has already created value for both the parties. How should Marc Graboff judge success in this negotiation? As president of NBC West Coast. Graboff refused to budge from the $500.It is important to understand the background in which the company arrived at this figure. both the parties will gain. thus sparking off a bidding war. by coming to an amicable agreement. At 8 pm on March 1. Q. It was a daring technique that might force paramount to go for a Take-it-orLeave-it offer. development commitments for Paramount. he showed his interest in Frasier by offering a number of pluses. and who is likely to get it? What obstacles might prevent agreement. he left office and told a surprised Paramount crew when they called that the negotiation would have to be resumed the next day. The obstacles are 1) The bad treatment of ͚Frasier͛ crew and show from NBC 2) Paramount taking a very aggressive stand at the outset without considering its BATNA They must resolve these issues/obstacles and start on a fresh page. success in the negotiation would happen if Frasier stayed with NBC at a price point the company was comfortable with. both the parties will suffer dentures.Q. He knew when to stall for time. NBC and Paramount remained approximately $500. How can Value be created in this negotiation. If the negotiations fall off. This in itself was good justification for having a show whose break even was lower than the license fee demanded by Paramount.000 apart per episode. such as offering Paramount a specified bonus. In the initial stages of the negotiation.000 figure. II.3. Graboff understood the importance of Frasier to the network. how would you want to compensate Graboff? Answer: For Marc Graboff. but at the same time did not want to take too big a hit on its revenues. This gave the other party the impression that the stakes were not all that high for Graboff.4.

His negotiating ability stemmed from a deep confidence in his knowledge of the industry and the stakes of each player. This would be management's reward for him. He constantly questioned Paramount's BATNA. 3|P a g e . IV. He was even willing to call their bluff on what they claimed were very attractive offers from rival networks. Graboff can be compensated by the NBC management by asking him to handle the exclusive negotiating periods for The West Wing and Just Shoot me which were due soon.III. If successful.

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