The process of negotiating contracts and deals is an art that requires finesse, strategy, and a deep understanding of the industry landscape. Whether you're securing the rights to a script, finalizing a distribution agreement, or hiring key talent, mastering the intricacies of negotiation is paramount. This guide is designed to help you make agreements that not only protect your interests but also foster collaborative relationships and propel your projects forward.
The number one piece of advice we can give is to spend as much time preparing for your negotiation as in active negotiation. Doing this leg work upfront will pay huge dividends down the road. Key pre-work includes gathering intel on involved parties, such as backgrounds, past dealings, and negotiation styles. Similarly, set internal objectives for your terms: goals, limits, what is crucial to get, and where are the likely gives.
One area that is useful but not always obvious is to think about what the counterarguments to your positions may be. Are they reasonable? How do we counter the counter? Anticipation is important here and is a large part of knowing your industry, situation, climate and counterpart. Know the precedent in terms of what has been done before or what the upcoming headwinds might be. Sometimes the negotiator and their client are not always in sync or have different goals or motivations. Knowing that is important.
Once you have that knowledge and research nailed, you can practice negotiation scenarios to sharpen skills and adaptability. This is a good way to figure out where the respective strengths and weaknesses are and where likely concessions may come. It’ll also help you anticipate where you might need to be flexible in your strategy. Of course, you will need to be open to adjusting tactics while staying true to goals.
Finally, and this should be obvious: Keep detailed notes and refer back to them. Nothing is more devastating to a negotiation than forgetting what you gave up previously and having it tossed back at you. By keeping notes and having clear objectives, you can best adapt to new information that arises during the course of the negotiation.
During the negotiation itself, we strongly suggest not being a jerk—that rarely pays off, and even if it does once, you may never get a second negotiation with that counterpart. Foster goodwill and be open to new ideas and suggestions to break deadlocks when they inevitably come up. It’ll show that you're willing to collaborate for mutual benefit. Another useful tool is using timeliness and deadlines strategically to influence negotiation dynamics, pace, and outcomes.
You will want to stay flexible, yet also keep to your objectives. If you fail to meet your overall objectives, you may close on a deal but immediately regret it. Deal momentum is important, but sometimes “getting any deal done” can lead to bad results for both sides.
Some things to keep in mind as you’re negotiating the deal:
- Have you defined the Key Performance Indicators (KPIs)?
- Have you set the key project milestones and associated deadlines?
- Have you properly addressed how to handle likely but unforeseen challenges?
- Have you clarified key terms in the deal like rights and ownership, payment terms, performance guarantees, termination issues, confidentiality, dispute resolution, allocating risk, communication processes, etc.
Finally, documenting the deal in a formal written agreement is the final and critical step in the negotiation process. Properly recording the terms and conditions that have been negotiated and agreed upon is essential for clarity, accountability, and legal protection. When documenting the deal, some things to keep in mind: Use clear and precise language as much as possible. Cover as many of the bases as possible in the contract. You will probably want counsel to do this.
If done properly and the negotiation has been fair to both sides, hopefully the formal contract—after it's signed—never leaves the desk drawer.
Remember, negotiation isn't just about reaching an agreement; it's about building relationships, safeguarding your interests, and contributing to the collaborative spirit of the industry. By internalizing the best practices and strategies outlined in this guide, you're poised to navigate negotiations with confidence and finesse.
