January 8, 2024

ADD CREATIVITY TO YOUR BOTH-WIN AGREEMENTS

NBC Television (the National Broadcasting Corporation) and the NFL (the National Football League) treated us to an example of just how powerful "Both-Win" negotiating can be. (Note to our international clients, the NFL plays "American style" football.)

As you know, at the Karrass Effective Negotiating Seminar, we first explore how to protect yourself in competitive negotiations; then we show you how to move into Both-Win agreements that create new value — a topic covered in more depth during our Effective Negotiating II follow-on program.

In an article titled "Healer Dealer," appearing in the April 26, 2005 issue of Sports Illustrated magazine, it was reported that NBC Sports and NFL executives negotiated a six-year, $3.6 billion deal that returns NFL football games to NBC Television in 2006 — after being gone for nine years.

This is a deal that is great for NBC, the NFL, and for football fans.

The NBC / NFL agreement calls for $600 million a year for six years. This buys NBC (currently a distant fourth in the TV ratings race) the following:

• four hours of potential top 10 prime-time programming every week;
• two Super Bowls (2009 and 2012);
• the annual Thursday-night opening game;
• two wild-card games each season;
• NBC also gets a platform from which to promote its prime-time lineup; and
• the NFL agreed to allow NBC to choose the late-season games it will show—a right not provided in prior network agreements—so fans will be treated to the most competitive games at the end of the season.

As the NFL negotiations progressed, Dick Ebersol (Chairman of NBC Sports) worked with Jeff Immelt (CEO of General Electric, NBC's parent company) to create several Both-Win elements to bring into the deal:

• GE Finance will play an increased role in the NFL loan pool financing program that helps NFL owners finance new stadium construction;
• NFL owners face increased security concerns, stadium security will be provided and promoted via GE's new Security Services Unit;
• fans and players will have the advantage of on-site medical technology provided and promoted by the GE Medical Products Company;
• It costs NFL owners a lot to illuminate these football stadiums—and GE is the leader in energy efficient lighting technology, and lots of GE light bulbs!

Goldman Sachs bankers estimate profits on the GE-based initiatives alone could total as much as $500 million.

This is just one example of how creative, Both-Win agreements can come together. You need to allow enough time to develop an understanding of the other parties' needs, establish a solid, trust-based relationship, and determine how each others' assets and resources correspond to each other's needs. It's this blending of organizational assets, resources and needs that opens the door to creative Both-Win agreements.