Scarcely 25 years ago, Fox languished as a second-tier network, far behind CBS, NBC, and ABC. It mostly broadcast on a then-inferior band (UHF) and lacked coverage in over 60 U.S. cities. To vault past these limitations, Rupert Murdoch was determined to make a deal that would snatch the most valuable National Football League (NFL) games away from CBS, their 38-year TV home that sported a legendary on-air broadcast team and enjoyed a great relationship with the NFL. Immediately after pulling off this improbable negotiation in 1993, a jubilant Murdoch confidently—and prophetically—proclaimed “Like no other sport will do, the NFL will make us into a real network.”
How could a mostly Australian team, led by Murdoch, with no experience in American football, persuade the NFL to abandon CBS and risk putting its crown jewels on Fox’s “small, rickety network?” Drawing on a wonderful 18,000+ word article by Brian Curtis, I’ve summarized this story and distilled 8 lessons for those facing today’s toughest negotiations.
To overcome these formidable barriers, Murdoch spearheaded a sophisticated negotiation strategy that I analyze in this online Harvard Business Review article in order to extract eight valuable lessons for negotiators wrestling with today’s most challenging deals and disputes.
Listing headline versions of these eight lessons—seemingly obvious but often neglected in practice—can’t possibly convey their real richness or how to apply them in difficult real situations. To overcome these limitations, I suggest you read my concise Harvard Business Review article online here (3 free articles) or my more detailed version here. But here’s a skeletal summary:
1) Develop absolute clarity on your interests and strategic objectives.
2) Carefully assess your competitors and counterparts — their interests, objectives, styles, and other characteristics.
3) Don’t think of the other side as monolithic, as if you will be negotiating with “CBS” or “the NFL.” Rather, probe the interests of distinct individuals and factions within these entities and watch for shifts in internal dynamics. Reassess these factors when new players become involved and/or circumstances change.
4) Use your assessment of new players to understand their distinct interests, valuations, and likely strategies.
5) As the incumbent, don’t underestimate your potential competitors, especially if they are hungry, smart, and rich — and may see your industry in entirely new ways.
6) From your evaluation of the players, their interests, and strategies, assess the main barriers that stand between you and your target deal.
7) In tandem with your financial bidding strategy, customize your negotiating approach in order to surmount each of the barriers you have identified.
8) If you are the incumbent and have the chance to preempt a formidable challenger, act fast.