Moms.Com Planning Document

MOMS.COM PLANNING DOCUMENT

Name: Osman Sarman, Hersh Agarwal         

Negotiation: Moms.com        

Role: Terry Schiller                                          

What issues are most important to you? (List in order of importance)

1. Licensing fee - $90,000 per episode
2. Financing cost – 65% up front, 17.5% in years 1 and year 2
3. Runs/Episode – 5 Runs/Episode (anything more than 6 runs is horrible)
4. Advertising revenue for WCHI – the higher ratings the show gets, the higher I price I can offer to WCHI
5. Compile the sale of Juniors in the same deal (WXYZ has offered $10,000 licensing fee per episode – there re 100 episodes)

Most focused on licensing fee and financing cost. Reruns are of lower priority.

What is your BATNA?  Reservation Price?  Target?

BATNA: Accepting WWIN’s offer with net value $2.5m for Moms.com and WXYZ’s offer of $1.0m

Reservation Price: $2.5m(+$1 for WXYZ)

Target: Based on the terms above and no other pieces of agreement I’m targeting the net value of value of the bargaining deal to be $5,883,750 (Excel sheet is uploaded)

What are your sources of power?

I can convince WCHI on the following grounds:

• The station lost its independent audience leadership to WWIN
• WCHI is a poor second with weak demographics
• WWIN is already has an outstanding offer ($70k, 7 runs/episode, upfront 15% + y1 35% + y2 50%)
• WCHI is financially stable however they need to increase their leadership

What issues are most important to your opponent? (List in order of importance)

1. Increase their viewership and be competitive against WWIN
2. Reduce licensing fee as much as they can
3. Delay payment to 1st, 2nd year and no upfront payment

What is your opponent’s BATNA? Reservation Price? Target?

BATNA: Not making the deal and remaining as the second station for ever

Reservation Price: Would allow them to profitable. Assuming revenue of 9.6MM, it would be around 6MM

Target: There are many combinations that lead to a price of $2,465,000. One way to get this is ($70k, 7 runs/episode, upfront 10% + y1 40% + y2 50%)