Pristine Entertainment Negotiation plan: Case Analysis

 



Pristine Entertainment  Negotiation plan: Case Analysis
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	My Best Alternative to Negotiated Agreement (BATNA) is simply my reservation point with some modifications for the particular deal at hand.  This is because the next best alternative is work is not to nothing, but instead work on a different deal. 
	I am the general director of Pristine Entertainment that organizes live rock concerts in Florida. Like most major organizers, Pristine Entertainment seeks to bring in the best rock bands and concert productions. Pristine Entertainment is privately owned and operated by a board of directors; therefore, the immensity of the primary decision-making concerning Pristine Entertainment falls to me. As the general manager, my major duties include booking the concert productions and structuring deals that profitable for the organization.  It is now December. As the general, I have restricted availability for booking gigs in my busy Pristine Entertainment schedule. As a principle, I would rather prefer to organize for a gig that would justify the expenses of putting on a show. This will require structuring a deal that is profitable for PE.  I have already talked with three promotion companies about the concerts for the November time slot. Particularly, I have spoken with PUNK ROCKERS Productions about bringing in Cold Play rock band. In addition, I have talked with JUST A BAND Productions about bringing in Linkin Park band. A week ago, I talked with FUNKIE FUNK Productions about bringing in Theory of a Dead man rock band.  While each of these alternatives are attractive, none is perfect. But my main concern was about ticket sales.   Coldplay band has received favorable appraisals and attracts a massive audience of soft rock fans. Of the three, I strongly believe it has the most potential in terms of ticket sales, Pristine Entertainment key source of revenue. PE financial analysts have projected that the company’s profits of Coldplay band in the November 23 time slot would be $1.5m. 

	As a tradition in the live concert business, the deal that I will structure with a production company will be a co-promotion, meaning that Pristine Entertainment and the production company will share show expenses and ticket revenues.  Nevertheless, the specific share of ticket profits has been established.  For instance, additional profits generated through particular activities, specially catering and franchise profit, automatically go into the Pristine Entertainment reserves.  Similarly, the sale of show goods and memorabilia (e.g., capes, wristbands and T-shirts) is the singular profit of the production company. The rationale of the negotiation with FUNKIE FUNK is to structure a deal for bringing Theory of A Dead man to Pristine live concert that would be more profitable to the company that the current alternative, Linkin Park. If this will not materialize, then Linkin Park will be Pristine Entertainment best alternative. 
	My job as the general manager of Pristine Entertainment is to get best negotiated contract for the concert at PE. When computing the profit for the concert to Pristine Entertainment, the value, determined by anticipated net ticket profits, is certainly a function of ticket sales. However, anticipate that Theory of Deadman will draw 75%. The best projection of the possibility of ticket sales and their equivalent profits is the following: 
Ticket			Profit			Anticipation
10000-15000		$4000000		20%
5000-10000		$300000		30%
3000-5000		$1500000		50%
The likely Pristine Entertainment show profits for a single night show as follows
(0.20*4,000,000 + 0.3*3,000,000 + 0.5*1,500,000)=$24,500,000
	The share of the ticket profits relies on the deal that I negotiate with FUNKIE FUNK. The board of directors has stringently stipulated that Pristine Entertainment share of the ticket profits must at least be 50%; in this case $4, 900, 000. However, these projections do not include salaries for the band and technical and security crew. 














References
Roger, F., William, U., & Bruce, P. (1991). Getting to yes: negotiating without giving in. New 	York, NY: Penguin Books