Negotiation Report Bestbooks Scenario

¶ … scoring being split almost evenly between Bestbooks and the agent. To begin the negotiation, each party familiarized itself with its issues. This was important to understand the parameters. The agent needed to close a deal quickly, but in a manner that was satisfactory to the client. The client had a fair amount of leverage as a top author, one who sells better than any of Bestbooks' other authors. Thus, both parties were motivated to make a deal.

Prior to negotiating, both sides needed to understand their respective positions, including their best alternatives to a negotiated agreement. The agent's BATNA was not good -- while Paige would surely get another contract elsewhere, the agent might lose Paige as a client. Failure to negotiate an agreement for this agent might result in the agent a receiving no money and losing the client entirely. The agent therefore had significant motivation to get a deal done.

Constraining this was the need to secure a deal good enough to have the opportunity to negotiate the next one. For the publisher, the motivation is the opportunity to sign the best-selling author in the country, an opportunity that does not come around very often. The publisher does not know whether failure would reflect on them or the agent, but cannot take the risk that Paige is offered a series of lucrative deals elsewhere, thereby costing the publisher the opportunity to sign this writer forever.

Given that both sides have substantial motivation to reach an agreement, they needed to determine which issues where the most important to them. The agent realized the royalties are the most important element followed by the advance. The advance is more important that the signing bonus, even at the same dollar value. Weeks promoting are not considered a significant issue, and other less critical issues for the agent are the number of books and the number of print runs for the book and countries distributed.

These are issues more important to the publisher. The negotiation was conducted on the basis of recognizing each other's position. The publisher realized that on some of its key issues, there were trade-offs that made sense. The more countries and print runs it could extract, the more likely it was to cover the cost of either an advance or a signing bonus. The publisher was able to compromise a bit on these issues because they were able to secure the maximum number of countries and book clubs.

The author benefits from increasing these as well, because the author gets a percentage royalty. Because these were two issues of mutual benefit, they were maximized in this negotiation -- there was no need for a trade-off because both parties benefit from maximizing the distribution of the book. The publisher and agent were able to agree on the money-based issues. The advance was higher than the signing bonus because the agent received more points by adding $5,000 to the advance than by adding $5,000 to the signing bonus.

To the publisher, either way is $5,000. The agent probably should have convinced the publisher to go with a $5,000 signing bonus and a $20,000 advance, which would have been worth 500 more points.