The negotiations between Disney and Lucasfilm - A negotiation case study

Summary

This video script details the negotiation process between George Lucas and Bob Iger for the acquisition of Lucasfilm by Disney. It highlights key negotiation strategies such as building trust, preparing to maximize value, and managing legacy concerns. As both parties navigate their interests, they emphasize the importance of mutual value creation, leading to a successful agreement worth $4.05 billion. The outcome demonstrates how effective negotiation can foster collaboration, preserving Lucas's creative influence while allowing Disney to revitalize the Star Wars franchise, ultimately benefiting both parties and their audiences.

Takeaways

• 😀 The fundamentals of negotiation include preparing a BATNA, identifying reservation points, and understanding anchoring.
• 😀 Trust-building is crucial in negotiations, as it helps create a collaborative atmosphere for discussions.
• 😀 Interest-based negotiation focuses on mutual value creation rather than a zero-sum approach.
• 😀 George Lucas was initially hesitant to sell Lucasfilm, valuing his creative independence and legacy.
• 😀 Bob Iger recognized the strategic importance of acquiring Lucasfilm to enhance Disney's portfolio post-Pixar and Marvel acquisitions.
• 😀 Both parties aimed to ensure the longevity and success of the Star Wars franchise during negotiations.
• 😀 Concessions were made by both sides, with Lucas negotiating for autonomy over the Star Wars narrative.
• 😀 The negotiation emphasized the importance of trust and historical precedent, as seen in Pixar's successful integration.
• 😀 The final agreement included a sale price of $4.05 billion, reflecting the value of Lucasfilm and its franchises.
• 😀 Lucas's continued involvement as a consultant allowed him to influence the future of Star Wars while ensuring financial security.

Q & A

What key concepts of negotiation were covered before the discussion of the Lucasfilm deal?

The key concepts included preparing for negotiation, determining a BATNA (Best Alternative to a Negotiated Agreement), establishing a reservation point, understanding anchoring, building trust, recognizing common pitfalls, and choosing the right communication medium.

What was Bob Iger's main goal regarding Disney's acquisition strategy?

Bob Iger aimed to ensure Disney's creative and competitive future by acquiring valuable franchises and characters, similar to past acquisitions of Pixar and Marvel, while also considering potential new projects.

Why was Lucasfilm seen as a valuable asset for Disney?

Lucasfilm was considered valuable due to its strong brand recognition, especially the Star Wars franchise, which had significant standalone value and the potential for extensive consumer product licensing and global reach.

What were George Lucas's concerns about selling Lucasfilm?

George Lucas was primarily concerned about maintaining creative independence and ensuring that the Star Wars universe would remain secure and true to his vision even after the sale.

What role did Kathleen Kennedy play in the discussions about Lucasfilm?

Kathleen Kennedy, a prominent producer and co-founder of Amblin Entertainment, was approached by George Lucas to co-chair Lucasfilm, helping to ensure the company could function independently of Lucas's direct leadership.

How did the discussions about creative control evolve during negotiations?

Initially, Lucas sought to retain complete control over the Star Wars franchise, but through discussions with Iger, he agreed to some autonomy while understanding that Disney would ultimately have final say over all things Star Wars.

What assurance did Iger give to Lucas regarding Disney's approach to management?

Iger assured Lucas that Disney would respect his work and allow for creative freedom, similar to their approach with Pixar, which retained its management autonomy after acquisition.

What financial terms were agreed upon for the acquisition of Lucasfilm?

The acquisition was finalized for $4.05 billion, split equally between cash and Disney stock, making George Lucas the second-largest shareholder in Disney after the sale.

What was the ultimate outcome of the negotiations for both parties?

Both parties emerged as winners; Disney gained a lucrative franchise with high potential for success, while Lucas maintained a connection to his legacy and received significant financial compensation.

How did the negotiation process reflect on the nature of mergers and acquisitions?

The negotiation illustrated that a successful M&A transaction can create mutual value rather than being a zero-sum game, as both sides made concessions and ultimately benefited from the deal.