It’s been all over the UK news. The Great British Bake Off – one of the biggest shows on the BBC – has been sold by its production company, Love Productions, to Channel 4 for a rumoured £75 Million pound, three-year deal.
The news came as a shock to many viewers for a number of reasons. The show has been with the BBC for seven years and many see the BBC as the channel that enabled the Bake Off to grow from a small-scale cookery show on BBC Two to the major prime-time BBC One reality TV juggernaut that it is now and thus its sale some might argue is as inappropriate as using shop-bought puff pastry in a Palmier recipe.
The numbers involved are also eye-watering. For a show that presents itself as being the epitome of “do-it-yourself” and “make-do-and-mend” involving a cast usually comprised of people who look like they’ve just got out of a community hall meeting to talk about proposals for a new cycle pathway, it is hard to equate that with a £25 million a year production bill. What exactly is costing that much? How much is the price of flour? For many, the commerciality of the deal seems to directly affront the principles of community and doing good to your fellow man that the programme seeks to inspire.
From a negotiator’s perspective, in looking at the deal, there are a few points of interest that can be made. These should all be taken with a pinch of salt (or baking powder) as with many negotiations what’s on the surface is only half the story and I know no more than any other commentator on what took place in the negotiation. However, on the basis of what has been released into the public eye, there are 5 points we can learn from this example about negotiation in other scenarios.
- Confidentiality is critical
How many TV rights deals do you know about? I would guess that the answer is not a lot and when you do hear about them they tend to be the biggest shows that are getting bought or traded. In this instance, the process of negotiation had been confidential but there have now been revelations about the price paid and the offer rejected (apparently £15 million a year from the BBC – doubling what they had paid up to this point). There may be any reason why the price is what it is but there is no reason not to agree confidentiality ground rules in relation to offers with all parties before a negotiation commences. For reputational and commercial reasons, it may be better to have complete confidentiality on the negotiation – even if a deal cannot be done.
- If the negotiation or outcome is going to be public, prepare your PR well in advance
There are negotiations that are going to be public in their output – either because they concern matters of public importance or some sort of public announcement will need to happen. Again, there needs to be a decision made about how any statement is going to be made from an early point in the negotiation. If the parties are not going to be able to reach agreement, then some sort of unilateral statement will need to be made. In this case, it was unfortunate for both the buyer and seller that the BBC made a statement about having lost the show before a statement was put out by either Love Productions or Channel 4 about their deal. In the event, the fact that no positive statement was put out early on made the deal look more sour to the general public – we were focussing on what was lost rather than what had been gained in the sale.
- Think about the elements that are needed to tie-in to a deal and involve all stakeholders
Within 24 hours of the announcement of the sale, the two hosts of the Bake Off, Mel Giedroyc and Sue Perkins had announced that they were quitting the show when it moves. There has yet to be an announcement of whether or not Paul Hollywood and Mary Berry, the famous judges from the series would remain. Before Giedroyc and Perkins’ announcement, Channel 4 released an initial statement that they would be very happy to have all four main presenters move to the Channel 4 version, so surely can’t have envisaged that the new series wouldn’t have had the people who had made it so popular. But this is what has happened. It seems an odd thing that the key players in the series had not been involved in the deal to transfer the series from one channel to another – this was a significant element of risk which should have been anticipated and dealt with. If nothing else, the price would have been negotiable (down) if it wasn’t clear that all elements would remain the same. The point here is that it is important to involve and think about all stakeholders (sub-contractors, staff, and potentially in this case, the public) in any deal before it is finalised.
- Think of ways to deal with numbers
The BBC has stated that the production company did not consider any figure below £25 million a year for the show. This may or may not be true but in dealing with a party who is trying to anchor on a large figure, there are several things that a negotiator can do. The first is to ask the party to define how they had got to that number and why it is that they need this sum? It’s easier to discuss and negotiate items when they are factored down into particulars, rather than just focussing on one figure. Indeed any negotiation where the figure has become the centre of the discussion, rather than what that figure represents is problematic. The second tool for a negotiator is to look at what other non-financial items can be offered in the negotiation and to discuss the wider context. Here the BBC would have had several non-monetary items, e.g. the possibility to do other series, ability to provide reputational promotion, which could have been traded. Finally, the financial element could have been looked at to see if there was a way of paying in a different way or on a different time scale. A £75 million deal over 3 years is different from a deal that could have been offered for 5 plus years.
- Know when to walk away
Ultimately, there may also be a time when you just need to walk away when the other party’s requests do not align with what you are able or willing to provide. There are few deals which are worth any price and every team needs to know what it will not do. This is your Best Alternative to a Negotiated Agreement. Here the money that BBC has saved can be used to develop an alternative series (Bake Off is not the be-all and end-all) and £45 million saved over 3 years is significant. Losing a deal is frustrating but signing up to the wrong deal is worse.