Adapted from, “Time for a contract renewal? Build on your past success,” first published in the July 2011 issue of Negotiation.
For fans of AMC’s hit show Mad Men, the news was terrible. In late March 2011, the network publicly confirmed that the fifth season of the show, originally set to air summer of 2011, would not air until early 2012.
A contract dispute with the show’s creator, producer, and head writer, Matthew Weiner, had held up the writing and production of the new season.
The network reportedly offered Weiner a $30 million, three-season contract, which would make him one of the most highly paid producers on cable TV.
But in an interview with the New York Times, Weiner explained that he objected to two requests from AMC:
– the network wanted to fire two cast members to save money,
– and it also wanted to add commercial time to each episode.
“I don’t understand why, with all the success of the show, they suddenly need to change it,” Weiner said. AMC also reportedly wanted to increase product placements on the show.
In 2009, during its previous round of negotiations with Weiner, AMC also had sought to add commercial time to the show, which costs about $2 million per episode to produce, according to the Wall Street Journal. The network ended up lengthening the show by two minutes to accommodate more ads. In the most recent negotiations, it refused to do so.
Negotiation Skills and Techniques – What to Do When a Partnership Needs Negotiation
The Mad Men re-negotiation illustrates the tension that can occur when two or more parties sit down to renew an expiring contract.
If the partnership is generally going well, each side is seeking to build on their relationship; at the same time, each side also typically wants more out of the deal, sometimes at the expense of the other party.
Fortunately for Mad Men’s fans, the parties involved were able to hammer out a creative, mutually beneficial agreement.
On March 31, the news broke that AMC and Lionsgate, the production company behind Mad Men, had struck a two-year production deal with Weiner. Under the new deal, only the premieres and finales of each season will run two minutes longer; regular episodes that air on AMC will be a standard 45 minutes (plus commercials). However, Weiner would be able to produce 47-minute versions of each episode that can be viewed online. Season Five is scheduled to begin airing in March 2012.
The studio backed off its request for cuts to the cast.
Product placements did not increase, but the parties agreed that Mad Men sponsors could speak publicly about having their products on the show.
Weiner also signed a long-term deal with Lionsgate that would extend the show through a seventh, final season. He said he was pleased to have a firm end date for the series, which would allow him to bring it—like the re-negotiation—to a satisfying conclusion.
In this article, we offer negotiation skills advice on making sure your next contract re-negotiation turns out just as well.
These stories suggest the following three guidelines may be important when you are revising a deal:
1. Recognize changing business conditions while negotiating.
If business partnerships never changed, re-negotiation wouldn’t be necessary.
But because personnel, fortunes, the economy, emotions, and a host of other factors are constantly fluctuating during the implementation stage, it’s prudent to revisit contracts at regular intervals.
As for Mad Men, the show had grown increasingly successful in the two years since the last negotiation between AMC and Matthew Weiner. The network recognized the benefits of locking Weiner in to two more years with a high salary.
At the same time, AMC was motivated to keep the show’s budget under control. Mad Men’s success made Weiner resist changes to the status quo, such as cast cuts. Because AMC needed Weiner, it was willing to concede this issue.
2. Respect integrity, egos, and the bottom line at the bargaining table and beyond in business negotiations.
The relationships that have formed through the life of a contract are a key aspect of re-negotiation.
If those relationships are thriving, it can be difficult to bring up problems that have arisen. But discussing problems openly is better than sweeping them under the rug.
Re-negotiation also offers the opportunity to raise new issues that will benefit both sides, according to Tufts University professor Jeswald W. Salacuse.
By presenting requests and proposals respectfully during a re-negotiation, you may be able to enhance rather than damage the relationship.
One way to convey respect is to acknowledge what matters most to the other party. AMC, for example, understood that artistic integrity was paramount to Weiner, whose obsessive attention to the period details of Mad Men was a critical factor in the show’s success. When Weiner protested that cutting cast members would undermine the show’s integrity, the network backed down. On the issue of commercials and show length, the two sides were able to come up with a creative solution (a longer version of the show that would air on the Internet) that appeared to satisfy the interests of both. As for Weiner, he demonstrated his respect for AMC’s attention to the bottom line by accepting slightly shorter versions of his show on TV.
3. Reframe key negotiation issues when necessary.
In your initial negotiation with your partner, you probably framed your talks around the gains each side could achieve.
By contrast, re-negotiations often are framed in terms of potential losses, notes Salacuse. You may need to talk about dividing up the costs of past losses, the possibility of ending your relationship, or cutting back on services for economic reasons.
If you find yourself resisting a change during re-negotiation, consider whether you have lost perspective.
During a weak economy, many people have had to accept lost business, salary cuts, and other hardships. By framing the negotiation in terms of what you still have, you may be able to approach a re-negotiation with a more positive attitude and greater creativity.
This doesn’t mean that you should take losses lying down.
Weiner complained publicly when AMC attempted to cut cast members and his show’s running time; he won the former battle and forged a livable compromise on the latter. Your goal should be to focus on maintaining a positive relationship while advocating forcefully for what you value most.