October 8, 2013
Art of the Deal - How Some of the Industry's Negotiators Tackle the Job
By Kaylee Hultgren
Are deals between programmers and distributors more contentious today than in the past? According to Patty McCaskill, svp and chief programming officer at Suddenlink, it's not the case with every deal, but generally it's "more contentious than it's been in my career, quite frankly." And she's been in the industry for more than 30 years. "There's a lot at stake and I'd say there's very little room for error," Tonia O'Connor, Univision pres, distribution sales & marketing, said during a panel at the WICT Leadership Conference Mon. Andrew Rosenberg, Time Warner Cable's svp of content and acquisition, concurred, saying that with so much consumer choice out there, "the stakes are higher than they have been." However, he added that the coverage of these deals, i.e. consumer awareness via the media, has increased.
So what's at stake? O'Connor said that while both sides are aligned in terms of wanting new technologies and the rights entailed to be a reality, it's hard to predict 5 to 7 years down the road—and that's necessary with multi-year deals. "Sometimes it's not always aligned on what that world looks like," she said. Also critical is knowing what's at stake for the person across the table, said Michelle Rice, evp, affiliate sales and marketing at TV One. McCaskill goes into a negotiation, which she likened to a game of "multidimensional chess," armed with lots of research—about the programming, viewership, ratings and what's changed since the last round. She tries to "really look at it holistically," even assigning "a value on what that renewal might look like," she said.
O'Connor noted that "having integrity on rates you're offering is incredibly important." But one thing she hates about the business is the fact that the negotiation often doesn't take shape until the expiration of the contract nears. In light of that, Univision has tried to pursue renewals early. Rosenberg agreed: "We try to get in front of the deals," he said, though he admitted that managing deal volume from an operator's perspective is a different challenge.
In the end, the key is the relationship between the two parties. "The deal is not over when you sign it," said Rosenberg. "It's an ongoing relationship." And while the deal itself is "the blueprint," the partnership continues and "there is constant tinkering." Indeed, when you near the end of a negotiation, the prospect of a long-term relationship kicks in, said Jane Rice, svp, distribution for AETN. It's important "to really ask questions" and put yourself in the other party's shoes, she said. All panelists agreed that while maintaining the relationship is key, it's important to take the personal aspect out of the negotiation. In fact, in O'Connor's experience, the boardroom tantrums she's witnessed have had "zero effect, even negative effect" on getting you what you need.
Ed Note: This story originally appeared in CableFAX Daily. Go here to subscribe.