Frasier Case

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NBC‟s aspiration level was $4.75 million (5% decrease). On the other hand, losing Frasier could mean an end to NBC‟s leadership in prime time, so company was willing to make some loses, but strategy was to limit that loss, so reservation price was a little bit higher than aspiration level. Story in the media was that Paramount is asking $8 million per episode, but real aspiration price was $6 million, since their first offer was an increase in price of 20%.

Later on, during the negotiations both parties offered new prices. NBC offered about $5 million and Paramount lowered their asking price to $5.5 million per episode, but still there was no ZOPA (Zone of Possible Agreement).

Besides the already mentioned features of these negotiations, it is important to bring up some other issues which make this deal very special. Leading man in NBC‟s negotiation team was Mark Graboff, who is former CBS employer. Since his recent transfer from one of the biggest competitors he had a lot of inside information. NBC tried to make a deal in low profile, but there was a lot of leaking information to the media and in Hollywood people are always trying to make a big story of everything, so the whole bargaining process had a big press coverage and it is much harder to make a compromise with a big public attention. Outcome without a proper solution which is acceptable for both sides might affect the whole industry and change the process of negotiations between studios and networks in future. Furthermore, when a show is switching networks it destroys value for both the network and the studio. There are just a few examples of successful transfers, but those shows were not as big hits as Frasier.