Monthly Archives: April 2011

It’s not surprising to hear Bertelsmann rumbling about buying EMI Publishing and/or Warner Publishing. It must always have annoyed them that they had to let BMG Publishing go in the wake of the Sony BMG Records merger. Having re-constituted BMG Rights as a replacement publishing vehicle it has grown quickly, but the opportunity to add Warner Chappell and/or EMI would help accelerate growth exponentially.

The question is, how ambitious will they be in their bidding? Bertelsmann have traditionally been very conservative in their bidding. There was a slew of sales of independent record companies in the 90’s – Virgin, A and M, Island, MCA. Bertelsmann was always involved in these car auctions – kicking tyres, but never buying. Sales of publishing catalogues are never just about price, but tradition says Bertelsmann would need to work hard on the other benefits they bring in order to avoid being outbid by competitors again.

Negotiation is the only answer ultimately, unless the Coalition not only wants to remove Gaddafi but also capture him and put him on trial. What the coalition forces need to decide is “what constitutes a win” in this negotiation. If it’s just getting Gaddafi to step down then a negotiated solution might achieve that. But, if you negotiate then you normally have to give something back in return. So if a negotiated deal is struck then it may be that part of the price is that Gaddafi and his henchmen escape justice and are given safe passage.

If the “win” is not only getting rid of Gaddafi but bringing him to account for his murderous regime, then even greater military action will be required. However, even if we send in an army as well as an air force there is no guarantee of a successful outcome, as our experience in Iraq shows. So, without negotiation the “win” will be much harder to achieve.

Response to original article (guardian.co.uk)

Vodafone’s policy of selling off minority stakes shows how its negotiating priorities have changed. It used to be the case that mobile operators were simply interested in growing user numbers, so it made sense to be in as many territories as possible, even those where only minority stakes could be obtained.

Now attention has switched to revenues per user (ARPU) and retention of paying customers. These attributes are easier to influence when you have control over the company.

Vodafone’s challenge in implementing its new policy may just be that it has made such a public statement about what it intends to do, that its co-shareholders are going to see it coming and hang tough in negotiations. So, it is going to have to work hard to secure good prices for its minority stakes. One thing Vodafone may have to do is to make sure it is always has a “BATNA” (a best alternative to a negotiated agreement) – including hanging on to its stakes. That way it will not look desperate to strike a deal and can hold out for a better price.

Response to original article (guardian.co.uk)

The real negotiation here may well have been about things other than the US budget deficit.

Politicians are often involved in “positional” negotiations where the intended target to be influenced is someone other the person across the table. There is another dynamic as well. All negotiators have a personal emotional agenda which has nothing to do with the organisational interests they represent. These personal needs might be to do with e.g. a need for respect or esteem or reassurance.

In the case of the budget deficit the positional requirements of the negotiators and the individual emotional needs of the negotiators involved will all have pointed to an imperative to get the deal done. Nobody involved would have benefited from a shutdown.

Response to Erik Sherman’s Article (bnet.com)

Given that a military victory in Afghanistan is impossible for the West to achieve, the only option is a negotiated solution of some kind. This is difficult for a number of reasons;

– The West and in particular the US needs to accept that a negotiated solution is not necessarily a defeat

– The Taliban will need to be included in any such negotiated solution

– There are many other stakeholders in any such negotiation, and all their needs will have to be addressed – not least a local population large parts of which appears to be hostile to the West, anti-Taliban, and very sceptical of their own corrupt Government.

For all these challenges though, the only alternative to negotiation is indefinite military intervention or the abandonment’s of the West’s hopes of ever creating a stable Afghan regime which is not a home to extremism.

In response to original article (theatlantic.com)

A tricky negotiation here for the Majors. HMV are clearly in desperation mode and need the sale or return terms to give them a bit of breathing space. For the Majors this represents a dilemma. If they agree to SOR then they expose themselves to greater risks at a time of plummeting revenues by way of CD sales. Furthermore the risk may have no upside because HMV may go bust anyway.

On the other hand if they leave HMV in the lurch and it goes down without the Majors having tried to help, then the last specialist music chain in the UK disappears from the High street. This is an even worse prospect for the Majors.

I would expect this WATNA (Worst Alternative to a Negotiated Agreement) to govern the Majors attitude and encourage them to find some way of helping HMV in its darkest hour, whether that’s through limited SOR or some other concession.

A response to this (Musicweek.com)

The Music Business has often liked to do deals where in order to get what you want you have to buy something else you don’t particularly want. If you want to retail the hit CD you have to buy the CD by the up and coming artist too. If you want the hits you have to buy the whole album with its filler tracks too.

No doubt, using this analogy, Citigroup would rather sell EMI off in one go rather than in bits. The Publishing company is profitable and an attractive target for other Major Publishers and Funds. The Record label is a less attractive proposition, as despite extensive restructuring it probably lacks the scale to compete effectively as a Major in a very challenging market.

So, it may be easier to sell the record label bundled up with the Publishing Company, than to find a buyer for it on its own.

However, this bundling strategy only works when there are buyers who are prepared to take on the less attractive part of a deal in order to get the bit that they want. The question here is, is there a buyer around who is in that position? Warner seem to have their own funding issues to deal with. BMG Rights are interested in records as well as publishing, but parent Bertelsmann went to some lengths to offload BMG Records to Sony. Would they be keen to take on a full blown record label again?

It may be that this transaction just has to be unbundled, despite Citigroup’s wishes. Just as you no longer have to buy the whole album to get the track you want, it may be that the Publishing Company will get sold without […]

I think the Coalition deal is going to come under real pressure after the May 5th local elections and referendum.

Firstly the Coalition is going to get hammered in the local elections. Secondly, whatever the result of the AV vote, one half of the Coalition is going to be unhappy. If there is a “Yes” vote then the Tories will be unhappy with Cameron for handing the Lib Dems the opportunity to win more seats at the next general election. If there is a “No” vote, a lot of Lib Dems will feel there is not much point in staying as a part of an unpopular coalition if there is no prospect of voting reform.

The rationale for the deal to get the parties into power, will feel less attractive in these circumstances and I could see the alliance coming under serious internal pressure from the wings of each party – particularly if Vince Cable leaves, which can only be a matter of time.

It’s good to see see Mahmoud Abbas turning away from violence even if a deal can’t be achieved in the Middle East. He knows that threats of violence have absolutely no impact on Israel and only serve to harden Israeli attitudes.

At the same time going to the UN for a unilateral resolution is not the answer either. Any solution needs the buy-in of all stakeholders, so imposing a solution will not achieve anything. What is needed is time for all relevant parties to realise that peace serves their interests better than war. For that reason it is silly for the Obama administration to set a deadline for September. This conflict has been going on for 3000 years, so it is not going to respond to a US short-term deadline that coincides nicely with their election cycle.

The split with Hamas that is apparently encouraged by Iran shows how difficult it is to get all sides to the table with a common aim of creating peace, and only serves to emphasise the long-term nature of the project.

Expert negotiator Stuart Diamond suggests that maybe giving the two sides some common economic goals to work on would be a great way of moving forward? This would be a way of focusing on common interests which are potentially more powerful than the competing interests which currently divide the two sides.

A response to article (Associated Press)

As the NFL annual draft begins, due to the ongoing labour dispute between team owners and the NFL players, it is still unclear as to whether the new players will even have games to play in come the start of the new season. So far the players have failed to negotiate a new pay deal via their union and have been ‘locked out’ by the owners.

I’m not sure mediation stands much chance of success whilst all parties are more focused on outside-litigious processes to try and give themselves an edge in the negotiation. Mediation requires both sides to want to reach a deal through discussion, rather than continuing to be preoccupied with getting a grip on the other through legal process.

As reported by the New York Times here, there could soon be more parties involved. Some of the players, including New England Patriots quarterback Tom Brady, have suggested they will hire a law firm to represent their interests in the negotiations.

I’m not convinced it will be helpful to have a law firm in the middle of the mediation. Lawyers often find it difficult to avoid being partisan and confrontational on behalf of their clients. Not a great position from which to mediate, which requires a willingness to suspend hostilities and work collaboratively towards settlement with the other parties.

I’ll be watching this one closely…