Why Producers lose negotiations and how you can avoid it.
I was embroiled in a tricky negotiation about a show a while ago . . . when I had a revelation.
The other party in said negotiation asked for something ridiculous, something absurd, something that didn’t make any sense. And I couldn’t understand why. Certainly they knew I was never going to accept such a thing. So why did they do it?
Because they could. They had zero risk. No downside.
Let me explain.
If an agent asks for the moon and the stars and the solar system, what’s the worst case . . . I walk away, right? I say, “No, I’m not going to produce that show,” and screeeeeech, I’m Audi 5000.
But here’s the thing . . . if I really wanted to produce that show (and Producers usually do), if the agent calls me back a few days later and says, “Listen, we talked to our client, and we’d like to work this out,” I’m going to work it out.
Because Producers are passionate about their projects. And the irony is that passion is a necessary characteristic that all Producers must have to be successful . . . but it’s that same passion that puts us at a disadvantage during a negotiation. We just want to close the deal and get on with what we want to do . . . create theater.
And agents know that. So the more manipulative ones ask for outrageous things, because they know they’ll always be able to go back to you at a lower number and you’ll jump to sign . . . even if you’ve walked away. Same is true for a Director you want, or an Actor you want. If the show/Director/Actor is your first choice, then they know you’ll always come back to the table.
So what can you do about it?
As hard as it is, you have to treat your shows like you’re supposed to treat stocks . . . with no emotion. During the negotiating process, you must try to replace the passion for the show with the passion you have for your investors. See, it’s easy for many people to think that Producers are negotiating for their own pockets. But they are not. They are negotiating for their investors’ pockets. Sure, if a show recoups, Producers make money, but we all know there’s only a 20% chance of that happening . . . so I find that most Producers, myself included, negotiate to get to recoupment. Producers are trying to create economic models that allow their investors to get their money back . . . so that their investors will do another show and another show and another show, which benefits everyone in the theater. Should our recoupment rate ever fall below its already low 20%, then theater will quickly be up against the ropes . . . and Producers must protect against that.
I know we all want shows to happen . . . we all want the perfect person . . . but the perfect show, the perfect person, also means a perfect fit with the show’s economics . . . or you must walk away. It’s not easy. It ain’t fun. And it may go against every fiber of your being. But you have to. Because the wrong deal can kill a show, no matter how good the show is.
We’re passionate people, us Producers, but the challenge of what we do makes it imperative that we throttle that passion up and down into both areas of art and commerce throughout the process of producing a show.
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