Frasier Business Negotiation

This case is describing about business negotiation between National Broadcasting Company (NBC) and Paramount-which is the owner of the show "Frasier", for its renewal contract. In our team's opinion, NBC has more power in this negotiation. On one hand because NBC has already had the show rights for more than eight years, whatever the revenue of this show fluctuated for time slot switching, NBC and this show have long-term cooperation base.

On the other hand, "Frasier" and NBC once dad TV show miracle together, Nab's leadership would also make sense to "Frasier", for "Frasier, switching networks will destroy value for the studio. Moreover, the license fee of NBC paid Is more than other network. To Paramount, though It could find another partnership, but It also would face with risks from audiences confusion. In the "Frasier" negotiation, there are three major parties: NBC, Paramount, CBS.

NBC had calculated that It would have to pay under $5 million per episode In order to make a profit on the show. NBC wants to come true Its break-even or Limit loss for "Frasier renewal contract in the next three years, at the same time, NBC won't want to see "Frasier switching to other networks who might be stronger competitors. Paramount seemed to be demanding $8 million per episode?an enormous increase over the current deal.

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Paramount felt uncomfortable for "Frasier" time slot moving by NBC and within long time cooperation, Paramount wants to see "Frasier" market value and influence in the Media Industry without NBC, if Cab's break-even license e would be about $3 million, dollars in the door to Victim were going to be greater from NBC than from CBS. CBS, who is bought by Victim in 1998, has advantage to negotiate with Paramount by their same network place, but they also would make the relationship more complex because CBS and Paramount shared a corporate parent in Victim. In any case, CBS won't refuse an offer of an available great show.

These three parties will influence the negotiation process and its outcome. If the "Frasier" estimation would not accomplish to everybody's interests, everybody's embarrassed, Graff risked having a frustrated Paramount present him with their Last Offer, a take-it-or-leave-it deal that would then allow Paramount to take the show to CBS and possibly fuel a bidding war. Nab's best alternative to a negotiated agreement (BATAAN) is paying under $5 million for renewal contract.

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