In business negotiations, we often assume that the more financially successful party holds the advantage. But power in negotiation doesn’t come from size or reputation alone—it comes from your BATNA, or Best Alternative to a Negotiated Agreement.
If a seemingly dominant party has a weak BATNA, the “weaker” side may ultimately prevail.
A vivid example of BATNA in action unfolded in 2015 between The Walt Disney Company and U.S. movie theater owners over licensing terms for Avengers: Age of Ultron.
Disney’s Licensing Demands and the Theater Owners’ Response
In spring 2015, Disney proposed changes to its master licensing agreement for U.S. theater owners who wanted to show its upcoming blockbuster.
Two key demands sparked controversy:
- Earlier end to discounted matinees – Disney wanted matinee pricing to end at 5 p.m. rather than the traditional 6 p.m.
- Minimum ticket price standard – Disney sought to use the National Association of Theatre Owners’ (NATO) national average ticket price as the minimum benchmark for revenue-sharing.
Under this structure, theaters charging below the national average—often in smaller or lower-income markets—would have had to contribute the difference to the shared revenue pool.
From Disney’s perspective, the move would prevent deep discounting that could reduce its share of box-office receipts.
From theater owners’ perspective, the proposal threatened pricing flexibility and potentially risked antitrust concerns.
John Fithian, then head of the National Association of Theatre Owners, sent Disney a letter describing an “avalanche of complaints” from theater operators and warning that the pricing mechanism could trigger legal scrutiny.
Why Disney’s BATNA Was Weaker Than It Appeared
At first glance, Disney seemed to hold all the cards.
The studio had produced blockbuster after blockbuster—Frozen, Pixar hits, and entries in the Marvel and Star Wars franchises. For top films, Disney reportedly secured up to 60% of box-office revenue, well above the industry norm.
But Disney’s leverage depended on access to theater screens.
If major chains refused to show Avengers: Age of Ultron, Disney’s revenue projections would collapse. Theaters needed Disney’s films—but Disney needed theater distribution just as much.
In BATNA terms:
- Theaters’ BATNA: Screen other films (perhaps less profitable, but still viable).
- Disney’s BATNA: Limit distribution—or suffer massive revenue loss.
When Disney reassessed its alternatives, it appeared to recognize that its BATNA was not as strong as assumed.
The studio retreated from its matinee demand and signaled flexibility toward smaller-market theaters.
The result? Avengers: Age of Ultron opened on May 1, 2015, delivering one of the biggest opening weekends in U.S. box-office history—a mutually beneficial outcome.
Four Negotiation Tactics for Weak BATNAs—or for Maximizing Leverage
This case highlights four practical negotiation strategies relevant whether you are facing an unappealing BATNA or trying to strengthen your bargaining position.
- Recognize the Limits of “Fait Accompli” Draft Agreements
Organizations sometimes attempt to avoid negotiation by presenting their terms as finalized documents—licensing agreements, standard contracts, or “non-negotiable” policies.
While this tactic can create psychological pressure, it has limits.
If demands feel overreaching:
- Counterparties may resist collectively.
- Relationships may deteriorate.
- The proposal may collapse entirely.
Draft agreements can anchor discussions—but pushing too far can backfire.
- Identify and Communicate Risks
The theater owners’ warning about potential antitrust implications may have shifted Disney’s risk calculation.
Empty threats damage credibility. But raising legitimate legal, reputational, or regulatory risks can alter the perceived cost of impasse.
When facing hardball tactics:
- Document objective risks.
- Communicate them calmly and factually.
- Avoid inflammatory language.
Risk reframing can weaken a counterpart’s confidence in their BATNA.
- Find Strength in Numbers
Individually, a single theater owner had limited leverage against Disney.
Collectively—through their trade association—they gained negotiating power.
Coalition-building can:
- Improve information sharing
- Strengthen alternatives
- Increase credibility
- Shift power dynamics
When facing a dominant player, coordination may improve your BATNA dramatically.
- Avoid Escalation When Your BATNA Is Weak
Disney ultimately avoided escalating the conflict.
Had it insisted on its demands, theaters might have refused distribution—a lose-lose outcome.
When your BATNA is weaker than anticipated:
- Reassess your leverage honestly.
- Preserve relationships.
- Look for mutually beneficial adjustments.
- Avoid forcing a showdown you may lose.
Backing down strategically is not defeat—it’s smart negotiation.
Key Takeaway: Power Comes from Alternatives, Not Appearances
Financial success, reputation, and market share do not guarantee leverage at the bargaining table.
Your true power lies in your alternatives.
Before pressing aggressive demands, ask:
- What happens if this deal collapses?
- How credible are my alternatives?
- How might the other side strengthen their BATNA?
Negotiation is rarely about who appears stronger. It’s about who can walk away more confidently.
I really like your article. I’m an undergrad student writing a paper on BATNA with one of my professors. We are focusing on the healthcare/life science industry. Would you be interested in reading the paper?
Also, I thought it was interesting how you talked about the theater owners using their strength of numbers. Do you think your concepts could work with regard to health insurance in America? We already have the Affordable Care Act, but many people think that’s not enough. More specifically, do you think the people can find a solution to our still expensive healthcare, or do you think hard nosed tactics like encouraging our representatives to write legislation tipping the scale in favor of the consumers is the solution? There was a middle ground with Disney and the theater owners, but is there a middle ground between the healthcare industry and the consumers?
At last, a sensible and accurate portrayal of the usefulness of BATNA.