What is NBC’s BATNA (if no agreement with Paramount, then what is their preferred course of action?):
Background: NBC is currently paying a License fee of approximately $ 5M/ episode. News media is speculating Paramount wants $ 8M fee for renewal. Paramount initially proposed $ 6 M (20% more than current), whereas NBC countered at $ 4.75 M (5% less than current). If the two parties are unable to form an agreement, then NBC’s BATNA possibilities are as follows:
BATNA # 1:
Bid for another show from a rival network / studio to fill the lost Frasier slot.
Risks inherent with this approach could mean uncertainty of advertising revenue received with the new show and reduction in viewership as not all viewers will ‘relocate’ along with the show. Some additional considerations with this plan of action include; contractual expiration and various agreements with the 3rd-party shows in question, complicated deal structures and delays associated with consummation and execution timing.
BATNA # 2:
Create a new show or leverage an existing NBC show to fill the lost Frasier slot.
NBC should be cautious, however, to rely on this Alternative carries significant uncertainty, and could mean that advertisers would likely reduce rates they are willing to pay in this slot. Furthermore, NBC does not have any shows in the pipeline with ‘hit’ potential to replace Frasier and maintain its viewership.
Advertising dollars abound with a proven hit show that draws large audiences consistently… changing this to a relatively unknown and unproven show, will result in lower