For Sony Pictures Execs, The Interview Tested Negotiation Skills

By on / Negotiation Skills

On December 17, Sony Pictures Entertainment made the unprecedented move of canceling the scheduled release of a major motion picture, the Seth Rogen comedy The Interview, due to the threat of terrorist attacks from hackers. The nation’s largest multiplex theater chains had already decided not to show the film in the wake of the threat and a cyberattack on Sony Pictures.

The edgy comedy stars Seth Rogen and James Franco as journalists who are recruited by the CIA to assassinate North Korean leader Kim Jong-un. U.S. officials have concluded that North Korea was “centrally involved” in the cyberattack on Sony Pictures, the New York Times reports.

Sony Picture’s ultimate decision to cancel the film can be traced back to the summer of 2014, when North Korea referred to The Interview as “an act of war” and threatened a “resolute and merciless response” to its release, according to the Times.

In reaction—and, breaking what was reportedly a 25-year-tradition of hands-off management—Sony CEO Kazuo Hirai interfered with Sony Pictures’ decision making by asking the division’s co-chairwoman, Amy Pascal, to have a scene in the film “The Interview” toned down. Hirai reportedly was nervous about a graphic depiction of the fictionalized Kim’s death—believed to be the first gory killing of a sitting foreign leader in a feature film.

Pascal then found herself negotiating between a rock and a hard place. She told Rogen, the film’s co-director, that Sony’s CEO had asked for a scene in which Kim Jong-un’s head explodes to be less graphic. Rogen reacted angrily, referring to the request in an email as evidence of “Americans changing their movie to make North Koreans happy.” Pascal admitted that she found it “embarrassing” to have to ask for changes, but asked Rogen to consider that the request was coming from the head of “the entire Sony Corporation,” according to BBC News. Rogen ultimately agreed to remove some, but not all, of the ghoulish details.

In addition to making the edits, Sony Pictures also decided not to release The Interview in Asia, and it removed the word “Sony” from the film’s promotional materials and credits. But the precautions may not have been enough to shield the company from North Korea’s wrath. The cyberattack on Sony Pictures this past November resulted in the disclosure of embarrassing and sensitive emails written by executives such as Pascal—including her exchange with Rogen—and the leaking of several unreleased Sony films online.

Sony’s problems may be traced in part to the importance of culture in negotiation and managerial decision making. Sources told the Times that Sony Pictures executives had decided to green-light Rogen and his co-director Evan Goldberg’s film for fear they would decamp to another studio. The desire to snare a film by hot young directors may have blinded Pascal and other Sony Pictures executives to its potential geopolitical repercussions.

In particular, they appeared not to seriously consider the possibility of North Korean retaliation for the film’s apparent mockery of Kim Jong-un and the North Korean government. Many Japanese, by contrast, view North Korean leadership as a significant, volatile threat. In recent years, the rogue nation has kidnapped Japanese citizens and conducted provocative rocket launches over Japanese territory.

When North Korea’s threat showed Sony what a great risk it had taken, Pascal was put in the delicate position of mediating negotiations between her boss in Japan and top Hollywood talent—and trying to balance safety concerns against the appearance of corporate interference in artistic decisions. The crisis points to the importance of considering the full range of possible repercussions of a given deal—not just for those at the table, but for those we represent.

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