I love a good saying.

A good saying distills a lot of wisdom into a small, memorable package. It can provide grounding and clarity in the face of complexity and confusion. It can be a tool for understanding what’s important to other people, or for reminding yourself of what’s truly important to you. A good saying captures a broader truth, which you can use to work better, or to live better, or to be better.

Perhaps that is why I find it so irritating that, if you’ve ever heard any “saying” about negotiation, it’s probably this one: “A good deal is one in which everyone feels equally unhappy at the end.”

I hate that saying.

I understand the appeal. A good saying can also be a salve for an anxious mind, and most negotiators, even professional ones — actually, especially professional ones — are driven first and foremost by anxiety. Anxiety about not asking for enough, or about giving away too much. Anxiety about not knowing the “right” way to answer a question or address an issue. Anxiety that the deal wasn’t “as good as it could have been” (or “should have been”). Anxiety that someone else might have done better.

The great irony of negotiation is that, while the essential purpose of a deal is to leave both sides better off for having made it, the process of making the deal — especially in the entertainment industry, where the pace of dealmaking is notoriously slow — often leaves both sides feeling worse, at least temporarily. So the idea that you’re supposed to feel bad at the end — that feeling bad might even be the sign of a job well done — is very comforting. Even more comforting is the idea that, as bad as you feel, the other side is probably in the same boat.

But as fleetingly reassuring as it might be, I’d argue that this saying is even more pernicious in its implications. It recasts misery as success, positions partners as adversaries, and frames the dealmaker’s role as mitigating loss rather than creating value. It assumes that negotiation is an inherently adversarial, zero-sum process — and, consequently, that if one side is happy, it can only be at the other’s expense. This saying is, at its heart, an incredibly bleak way to think about what “good” looks like.

We can do better than that.

A chapter about negotiation was, by far, the most common request I received from students and readers about what they’d want to see in a second edition. I ultimately organized that chapter around a handful of vaguely folksy-sounding one-liners — what I called my “Philosophy of Negotiation in Eight Adages.” But these adages weren’t written for the chapter; the chapter was written for them.

I developed these aphorisms over hours and years of conversations about the craft with students, colleagues, and mentees. I did so because my job in those conversations was to capture and convey, in brief and densely-packed exchanges, the lessons that I had taken years to learn. The sayings were a good way to try to distill a lot of wisdom into a small, memorable package.

But I soon noticed that I was reciting the same well-worn one-liners to myself even when no one else was in the room. They provided me with grounding and clarity in the face of complexity and confusion. They helped remind me what was important. They captured some broader truths that I care about deeply (then and now). I may have coined these aphorisms to be a tool for others, but they turned out to be just as helpful for me.

Today, in Part 2 of my three-part republication of the full text of Chapter 13 of the 2024 second edition of The Business of Television: On Negotiation, I share the first four of those sayings with you — starting with the three words that embody my most important demand of anyone who works for me:

C. A Philosophy of Negotiation in Eight Adages

This chapter does not provide a comprehensive framework for negotiation as a discipline, nor a list of tactical “tips and tricks” for achieving good results. There are no “dos and don’ts” to be found here. Rather, what I offer is a values-based philosophy of negotiation, embodied in a list of eight personal adages that I have found helpful in developing my style and identity as a negotiator, and in advising other young professionals as they do the same. They can sometimes be a bit redundant with one another, and to some extent repackage the academic literature on negotiation in folksier language, but these are the answers I give when asked to opine on “what makes a good negotiator” or “what makes a good negotiation.” I hope they prove as useful to you as they have been for me.

i. Negotiate, Don’t Haggle

If I still had an office with a whiteboard, that whiteboard would have permanently written across its top, in big block letters, “NEGOTIATE, DON’T HAGGLE.” On its face, that might seem like a merely semantic distinction. But it is meant to capture a wide suite of mindsets and behaviors that distinguish many of the industry’s most respected and effective negotiators, such as:

• Hagglers concern themselves exclusively with what the deal terms are; negotiators are concerned with why the deal terms are what they are.

• Hagglers gain ground in a negotiation through stubbornness, force, and sometimes sheer annoyance and exhaustion; negotiators gain ground in a negotiation through persuasion.

• Hagglers ground their positions solely in their personal instincts and desires; negotiators support their positions using objective criteria.

• Hagglers abstractly know what potential outcome or deal term is better for them; negotiators understand the real-world significance to both parties of such an outcome or deal term.

• Hagglers rely on “policy”; negotiators can articulate the reasons why a policy exists and must be respected.

• Hagglers consider only their own perspectives in a negotiation; negotiators endeavor to understand and account for the perspectives of the people on the other side.

So yes, “Negotiate, Don’t Haggle” is arguably just a folksier way of saying “engage in interest-based negotiation, not positional bargaining.” And to be clear, my premise is not that “negotiating” is a better approach to dealmaking than “haggling” simply because it’s more agreeable — it’s a better approach because in my experience, both in most individual transactions and certainly across many deals over a long career, it yields better results.1

Why, then, does “haggling” remain so prevalent? The short answer is simply that “negotiating” is a lot harder than “haggling,” and usually takes a lot of practice.

Many professionals develop into “hagglers” not necessarily because they’ve judged it to be a superior way to get results, but simply because they haven’t gotten the level of training and education necessary to be capable of truly negotiating. Because the entertainment industry generally does not place a high premium on professional development, many negotiators learn their craft principally via observation rather than instruction. When presented with an unfamiliar type of deal, many early-career professionals are told to educate themselves by reviewing past deals, rather than being actively talked through them. The totally self-directed young professional may be able to identify all the major moving parts of any given deal type and to generally distinguish (from their own perspective) the “good” version of each term from the “bad” version, but without further instruction, may not understand what exactly makes the “good” version of each such term better than the “bad” one, or if and when it will actually matter in the real world.2

Negotiating at a high level requires a deep understanding of the meaning and significance of every point under discussion, the ability to identify issues that are not currently being discussed but could or should be addressed, a familiarity with industry custom and practice as it exists today and as it has evolved over time, an understanding of your client’s priorities and anxieties, and sincere curiosity about and empathy for the priorities and anxieties of the opposing side. And negotiators must be able to identify and make the arguments that will be most persuasive to the people they are actually trying to persuade, and not simply to themselves and their own clients.

That is why the more technical chapters of the book focus not only on identifying the major components of each deal type and the typical range of outcomes in their negotiation, but also on discussing the real-world implications of various deal terms, relevant historical context and business rationale, and the arguments that are frequently deployed by the negotiators on each side of the issue. The fundamental purpose of these chapters is to empower readers to develop themselves as negotiators, and not simply as hagglers, from the very beginning of their careers.

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There are a few questions that I think virtually every young lawyer, talent representative, and executive wonders about at some point early in their career, but almost never asks aloud:

What does being “good” at negotiation look like?

How do I get better at negotiating?

Am I a good negotiator?

(And how can I even know for sure?)

If you’re reading this now, there’s a good chance that — whether or not you’re a lawyer, or even think of yourself specifically as a dealmaker — negotiation is a pretty significant part of your job. But I’d guess that, even among this self-selected group, if you were asked to answer that first question, it would be hard to come up with something more specific than Justice Potter Stewart’s famous test for what constitutes constitutionally unprotected hard core pornography: “I know it when I see it.”

Even well into my own career as a professional negotiator, I probably couldn’t have done much better than that. It was only when I started managing and training more junior negotiators — having them listen in on some of my phone calls, and then debriefing with them afterward about what they had heard — that I began to think systematically about what I had always done instinctively. And as I had more and more of these post-call debriefs, I started noticing a few phrases recurring in my commentary about the negotiations my colleagues had observed.

Negotiate, don’t haggle.

Every negotiation is three negotiations.

Pay people in the currency that’s most valuable to them and least valuable to you.

When I (finally) began writing the second edition of my book in December 2023, the first section that I wrote — the topic that ended a year spent “preparing to start” or whatever other euphemism I was using for “blowing past deadline after deadline while not actually writing” — was my brand new chapter about negotiation. Two days later, I emailed what I described as the “admittedly extremely self-indulgent*** first draft” to a handful of friends who had offered to serve as draft readers, with a promise to “circle back with a future version that reflects plenty of extra effort in editing,” and the following footnote:1

I did put plenty of effort into editing that draft before publication.2 But I guess I didn’t really end up killing any of those darlings.

I led with the chapter on negotiation because, as I wrote in that email to my early draft readers, it was “the one major addition I knew I wanted for this second edition (and which was most often requested by students and other readers I heard from)” — but it was also, I quickly realized, the thing I was most personally excited to start writing about.

By that time, I had learned to talk to my team at work about negotiation in vaguely folksy aphorisms — things I’d call “sayings” if I thought anyone else said them.3 The point was to distill my own beliefs and practices into simple, memorable, and actionable advice. But in the process, I came to realize that, over 15 years of doing this for a living, I had unintentionally developed a whole philosophy of negotiation that guided how I approached the work. That philosophy was grounded in academic scholarship about negotiation, which I had first encountered in law school, but it was also empathetic, values-driven, and aspirational — and, I had no doubt, effective. I was proud to offer it to the executives who looked to me for mentorship.

It felt like a privilege — and a real opportunity to promote the kind of business environment I wanted to operate in — to get to share it with readers of my book. And it still feels like a privilege (and an opportunity) to share it with readers of this Substack.

Over the next three posts, I’ll be republishing the full text of Chapter 13 of the 2024 second edition of The Business of Television: On Negotiation. Having re-read it while preparing these posts, I can tell you confidently: I stand by every word.

13. On Negotiation

One of the essential goals of this book is to help prepare television professionals of all levels and types to be effective negotiators. And most people instinctively understand that highly effective negotiation requires a combination of both talent (or “innate” ability) and skill (or “learned” ability).

In the context of negotiation, then, “talent” may refer to one’s natural ability to persuade others, to “read” the intentions and truthfulness of others, to speak with clarity and specificity, to remain calm and comfortable in stressful or ambiguous situations, to be adaptive or “quick on one’s feet,” and/or to instinctively build trust and rapport with others, even in oppositional situations. “Skill,” on the other hand, may refer to one’s learned intellectual mastery of complex issues, knowledge of historical industry custom and practice, awareness of relevant precedents and analogs, and/or familiarity with negotiating “tactics” that can be helpful in achieving desired results.

In practice, the line between “talent” and “skill” is far fuzzier than that simple distinction between “innate” and “learned” ability would suggest. Great instincts can effectively compensate for (or even altogether mask) a lack of deep understanding, just as many so-called “innate” qualities like persuasiveness and likeability can be honed with study, introspection, and practice.4 Most people instinctively recognize that mastery in virtually any field usually involves at least some combination of discernible “talent” and “skill,” but that greatness can be achieved via a wide array of combinations of the two. As with many pursuits, perhaps not everyone can be a great negotiator, but most smart people can at least become a pretty darn good one.

Perhaps the most underappreciated missing link between talent and skill — the thing that arguably separates the good negotiators from the great, and allows for greatness to be built on virtually any given combination of talent and skill — is philosophy. That is what I try to provide here: a negotiating philosophy for the working professional, developed in the course of my work as a professional negotiator, offered principally for the benefit of those who are on the same career path.

Like the rest of the book, this philosophy reflects the perspective of not just any professional negotiator, but specifically a studio business affairs executive. I note this because, having spent part of my career as a talent representative as well, I recognize that it is a different job, with its own unique set of challenges, expectations, and responsibilities. Lawyers and agents have fiduciary duties of loyalty and zealous representation, which some could interpret as being at odds with the more collaborative philosophies espoused here.5 Moreso than business affairs executives, agents and talent lawyers may be driven toward a more adversarial style by the expectations of colleagues and clients who place a particular premium on toughness and aggressiveness as values in and of themselves. Some clients like to think of their representatives, “He’s an asshole, but he’s my asshole,” and feel more comfortable being represented with a more pugnacious approach than I advocate for here. While throughout this chapter I use the word “client” interchangeably to refer to an artist represented by an entertainment attorney/agent or a company represented by a business affairs negotiator, I recognize that the relationship between an independent representative and an individual artist is fundamentally different than that between a salaried executive and their colleagues and/or corporate employer. And, like it or not, based on my experience on “both sides of the aisle” in entertainment industry negotiations, business affairs executives are simply held to a different set of rules of engagement than their counterparts on the other side — the kind of hyperzealous advocacy that might earn a high five from a grateful client can easily result in ruffled feathers and angry calls to colleagues or bosses for a studio negotiator. Nevertheless, I believe that these principles are fundamentally sound and can be deployed ethically and effectively by negotiators on any side, under any expectations, and in any context (in the entertainment industry or beyond). Others may legitimately disagree, but they aren’t writing this book.

In addition, while business affairs executives and talent representatives often proudly embrace their identities as “the negotiators,” they don’t have a monopoly on negotiation, which is, at its heart, the art of persuasion. And persuasion is arguably at the core of virtually every interpersonal interaction — if not in all aspects of life and business, then certainly in the famously relationship-driven, unavoidably collaborative and interdependent world of the entertainment industry.

If you work in this business, in any discipline, at any substantial level, part of your job is negotiating, whether you explicitly recognize it as such or not. Each of the following adages can inform how you engage with colleagues, business partners, or anybody else you hope will do something you want them to do (and who, in turn, hopes that you will do something they want you to do). At their most ambitious, these adages don’t just represent a helpful framework for doing your job well; they offer you a career path in which meaningful human relationships built on mutual trust and respect are both a cause and an effect of your success.

A. Why Is This Chapter Different from All Other Chapters?

In general, The Business of Television strives for objectivity. Although it is, of course, grounded in the author’s idiosyncratic professional interests and experiences, it seeks to offer information, not advice, and, except in rare and clearly labeled cases, to describe the world as it is and not as it “should” be.

This chapter is unique in that it is very much about advice. Like all advice, it is subjective and personal, which is why this chapter is the only one in the book to use the words “I” or “my,” or to address the reader directly as “you.” Like all advice, it necessarily reflects my personal biases and preferences. And, as with all advice, readers will no doubt find other purveyors of wisdom who would disagree wholeheartedly with any or all of it, starting with my earlier assertion that negotiating philosophy matters at all.6

Some might also argue that this chapter describes the world as it “should” be rather than as it is. I might agree with that statement, at least in part. A close friend (and creative executive) once said to me, “Our careers should all be a paradise! We get to tell stories and do cool shit for a living. This should be a Shangri-la. But a few people just have to go and ruin it for everybody.” And to some extent, the philosophy presented here represents an aspirational worldview in which we all finally get that Shangri-la.

But when I say this chapter is about advice, I of course intend that it be good and helpful advice — and, based on my own personal experience, that’s what I think I’m offering here, for people across the negotiating landscape. I don’t pretend that the beliefs presented are (or will ever be) universally held within the industry, or that there aren’t plenty of prominent negotiators who have succeeded with a very different approach (and perhaps a very different worldview). But I would argue, conservatively, that most of the best negotiators in the business have built their success on at least some of the values embodied in this philosophy.

B. But First, an Academic Framework

The philosophy presented here is heavily influenced by contemporary academic literature about negotiation, particularly the concept of “interest-based negotiation,” a negotiating paradigm first developed and promoted by law school faculty members at the Harvard Negotiation Project.7 Scholars may use the term “interest-based negotiation” somewhat interchangeably with “principled negotiation” and/or “non-adversarial bargaining.” The founding text of interest-based negotiation is Getting to Yes: Negotiating Agreement Without Giving In, first published in 1981 by Harvard professors Roger Fisher and William Ury (with Professor Bruce Patton added as a co-author for more recent editions).8 Getting to Yes offers four guiding principles for negotiation — (1) separate the people from the problem; (2) focus on interests; (3) invent options for mutual gain; and (4) insist on using objective criteria. In so doing, it offers “interest-based negotiation” as a superior alternative to what might be considered the “traditional” negotiating paradigm, referred to as “positional bargaining” or “position-based negotiation.”

Positional bargaining conceptualizes negotiation as a fundamentally adversarial and zero-sum process. Discussion is focused narrowly on the issues presented, and every negotiation is approached as a one-off exercise in which there is a fixed “pie” of value to be divided, with each negotiator trying to secure as much of that “pie” for their side as possible, at the direct expense of the party on the other side. In positional bargaining, negotiation is a form of warfare, meaning that somebody wins and somebody loses — and that, as the old saying goes, “all is fair in love and war.”

Interest-based negotiation presumes that the desired outcome of any deal is to leave both sides better off for having made it, and that — especially where both parties work interdependently and rely on one another to achieve common goals — a good negotiation considers and protects relationships as well as outcomes. In interest-based negotiation, a great negotiator isn’t someone who claims the most value; it is someone who creates the most value. Interest-based negotiation challenges both sides to consider not just what both sides say that they want, but crucially, to consider why they want it. It therefore emphasizes fairness, credibility, trust, and creativity.

Countless academic classes on negotiation present the same “day one” hypothetical to illustrate the difference between positional bargaining and interest-based negotiation. Imagine two friends who are arguing over the use of a single orange. Positional bargaining assumes there is one orange to go around, and the “winner” is the person who gets the most of it for themselves. Party A’s starting position is that Party A gets the whole orange; Party B’s starting position is that Party B gets the whole orange. All other things being equal, the most obvious and likely result is that the parties simply cut the orange in half.

Interest-based negotiation demands that both sides seek to understand why each party wants the orange, on the belief that such understanding will yield a more efficient and mutually satisfactory outcome. If the negotiators commit to this inquiry, they might learn that Party A wants to grate the skin of the orange for its zest, while Party B wants to squeeze the orange’s pulp for its juice. If the negotiators can look past the parties’ respective positions (“I get the orange”/“No, I get the orange”), and get to their underlying interests (“I want orange zest”/“I want orange juice”), then both sides can leave the negotiation happier and better off just by peeling the orange rather than chopping it in half.

Interest-based negotiation isn’t a perfect paradigm. Obviously, few real-world negotiating problems are quite so simple, or so elegantly resolved, as splitting an orange. Critics have derided the approach as idealistically taking the world as it “should be” rather than as it “actually is.”9 Some issues — most obviously, money — really are zero sum, at least when taken in isolation. And some negotiations are true one-offs, in which there is little or no value to either side in preserving a long-term relationship rather than ruthlessly maximizing immediate gains.

Though undeniably imperfect, interest-based negotiation has grown increasingly influential as a productive and refreshingly un-bleak alternative to the Kissingerian10 worldview embodied in traditional positional bargaining, and high-level business executives and government officials routinely receive trainings from Harvard’s Program on Negotiation.

Hollywood — with its close-knit group of repeat players, both as principals and as representatives across a variety of business relationships, all mutually interdependent on one another to generate anything of substantial value — would seem to be an ideal context for interest-based negotiation to thrive. Unfortunately, this largely has not been the case.11 And admittedly, ruthless negotiators with unflinching willingness to unapologetically exercise their leverage can be particularly difficult to productively engage with this approach. Nevertheless, I stand by my earlier statement that many of the best negotiators in town (and certainly the ones that people generally enjoy dealing with) have thrived by — in their own ways and on their own terms — putting the following adages to work in their own careers.

Analogies about the best way to divide an orange are all well and good, but how do you make interest-based negotiation work for you in the real world, where the stakes are a bit higher (and the issues more complicated) than juice and zest? Over the next two posts — running this Thursday (August 20) and next Monday (August 24) — I’ll share the eight adages that guide me in every negotiation to this day, starting with the three words that I believe most separate the good dealmakers from the great.

If you’ve ever tried to look up a union scale number by browsing through one of the “wage tables” or “schedules of minimums” that are published by the WGA, DGA, and SAG-AFTRA, then you know that they are…less than user-friendly.

It’s not that there isn’t any logic to how these “official” guild-published tables and summaries are organized; it’s that the logic is absolutely useless to at least 99.99% of the people who use these documents. That’s why many larger companies require some junior member of the business affairs, production, or finance team to create and/or maintain a one-to-two-page “cheat sheet” summarizing that company’s executives’ most frequently referenced minimums, and why many more companies employ at least one executive who is able to obtain copies of such cheat sheets from friends at larger companies.

I first attempted to create my own tables of key union minimums while working on the first edition of my book, published in 2018. For the second edition, published in 2024, the WGA and SAG-AFTRA tables were well-organized, but slightly off due to a combination of author errors, rounding errors, and the WGA electing to divert 0.5% from its wage increase to PH&W.1 The DGA tables were…a noble effort. I tried very hard and spent many, many hours trying to crack them. I made real progress! I didn’t quite get there.

When I decided to launch this Substack, I figured it was time to conquer these damn things once and for all — if not for the benefit of the readers who had already seen me go through two close-but-no-cigar efforts in my books,2 then for the satisfaction and utility of creating for myself a reference tool that organized all of this information exactly as my own brain preferred.

This is that reference tool. The full set of tables is available only to subscribers, but you can check out a few samples below.

WGA Minimums Organized However Your Brain Likes Them

Spend enough time staring at tables of WGA minimums and you’ll realize that, although they are individually defined for each pairing of platform type and budget range, the whole system pretty much comes down to a “broadcast/A-level streaming” tier and a “cable/B-level streaming” tier. I experimented with two different ways of organizing this information, unsure of which I should use, until I realized that any given person might prefer one format or the other depending on how their brain worked, which meant I should just publish both:

Pilot and Episodic Script Minimums by Platform

Pilot and Episodic Script Minimums by Fee Grouping

Here’s the full list of WGA rate tables:3

1. Minimum Scale Weekly Compensation

2. Major WGA Money Breaks

3. Pilot and Episodic Script Minimums by Platform

4. Pilot and Episodic Script Minimums by Fee Grouping

5. Upset Prices and Minimums for Rewrites, Polishes, Stories Only, Teleplays Only, Formats, and Bibles

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DGA Minimums Without the Eye-Glazing Density

One of the things that makes the DGA’s wage tables so difficult to read is the density of numbers on every page, which is a function of the DGA’s uniquely complex, budget-sensitive, and platform-specific approach to minimums. That’s why I start by defining specific “High Budget,” “Mid-Budget,” and “Low-Budget” tiers, broken out by program length and platform type:

DGA Program Budget Thresholds by Program Length and Platform Type

That makes life much easier for the other seven DGA rate tables on the list:4

1. DGA Program Budget Thresholds by Program Length and Platform Type

2. Standalone Pilot Directing Minimums

3. Episodic Directing Minimums for One-Hour Programs in Broadcast and Basic Cable

4. Episodic Directing Minimums for One-Hour Programs in Streaming and Pay TV

5. Episodic Directing Minimums for Half-Hour Programs in Broadcast and Basic Cable

6. Episodic Directing Minimums for Half-Hour Programs in Streaming and Pay TV

7. Straight-to-Series First Episode Directing Minimums for One-Hour Programs

8. Straight-to-Series First Episode Directing Minimums for Half-Hour Programs

SAG-AFTRA Minimums Organized Usefully if Unimpressively

There’s one table. It’s actually quite helpful, given how many different SAG-AFTRA minimums there are (and how few of them actually matter for most working executives). So I’m going to save it for subscribers.

But if you’ve been on the fence about subscribing, would 40% off the first year of your monthly or annual subscription help you with your decision? Because if so:

Subscribe now

Since Comcast first announced its plans to spin off its NBCUniversal and Sky units into a new debt-laden standalone publicly traded company — which, for convenience, I’m just going to refer to as “NBCU” — one question has dominated the public conversation around the news:

So who’s going to buy NBCU?

And since day one, I’ve given the same answer to that question: don’t sleep on David Ellison.

Typically, my provocation elicits a response in the neighborhood of “No way. It’s unimaginable.”

To which I usually respond: have you been paying attention for the last decade or so? Because a lot of things that once seemed “unimaginable” — in this business, in this country, in this world — have proven to be very very real. And in this, the year of our lord 2026, the mere fact that something seems like it “couldn’t” or “shouldn’t” possibly happen just isn’t reason enough to conclude that it won’t.

Over the first two installments of this series, I’ve argued for why you shouldn’t underestimate the transformative impact of Comcast’s plans to spin off NBCU. I’ve pushed back on those who think it means the end of the bigger-is-better logic that has dominated the industry throughout the twenty-first century, and on those who dismiss the announced spinoff as “never going to happen.” But at the same time, I’ve joined the chorus of voices predicting that Comcast’s announcement will prove to be merely a prelude to a bigger process (and a bigger deal) that will truly define what the immediate future will look like — for NBCU, for its employees, and for the industry as a whole.

Today, I conclude my three-part series on the Comcast/NBCU split by taking a closer look at what that bigger process might look like. Is Comcast looking to expand NBCU or to expel it? What companies and individuals might be plotting their next big move right now? And is David Ellison taking over a third major studio really as unimaginable as it seems?

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Is NBCU a Buyer or a Seller?

It’s a seller.1

That’s not to say that a standalone NBCU doesn’t have the wherewithal to be a buyer. But I don’t see any plausible acquisition targets that would materially improve its competitiveness as a standalone player.

Lionsgate? I actually have a soft spot in my heart for the perennially-for-sale Lionsgate, which I think deserves more credit than it gets for investing successfully in innovative but risky and unproven concepts and platforms (like AMC’s Mad Men and Netflix’s Orange Is the New Black2), or for nurturing a small but mighty list of surprisingly durable franchises (such as The Hunger Games, John Wick, Twilight, and Saw). But I don’t see how absorbing Lionsgate meaningfully changes NBCU’s competitive position, or makes it significantly more appealing as an acquisition target.

Sony? Unlike Lionsgate, Sony/Columbia seems substantial enough to meaningfully move the needle for NBCU both as an active competitor and an acquisition target. But Sony has demonstrated a consistently careful, cautious, and deliberate approach to high-level corporate dealmaking. As a buyer, it has largely focused on targets like Industrial Media and Alamo Drafthouse — big enough to meaningfully expand its capacities, but small enough to reliably ingest without choking. And while buyers love to speculate about it as a seller, I’m not aware of a single time that Sony Corporation in Japan has seriously entertained any such opportunity.

A24? A24, with its uniquely strong brand identity and cross-generational cool factor, would theoretically give NBCU something genuinely new and additive. But if its owners are looking for an opportunity to cash out, they may find that they’re a victim of their own success. A24’s private equity-driven $3.5 billion valuation will be hard to justify or sustain as part of a publicly traded enterprise. Even more importantly, it may well be impossible to convert A24 from a scrappy indie upstart to a subsidiary of a stodgy corporate behemoth without torching the brand credibility, distinctiveness, and goodwill that are the company’s greatest assets.3

Roku? Maybe if Fox hadn’t beaten them to it. No chance now.

If NBCU Is a Seller, Then Who’s the Buyer?

Saying that NBCU is ripe to be sold is easy. Identifying who will buy it is substantially harder. When Paramount and Warner Bros. went on the block in 2024 and 2025, respectively, there was a clear shortlist of credible buyer candidates for each. The outlook for NBCU is much murkier — many plausible options to entertain, many legitimate reasons to doubt each, and no clear frontrunner. None stands out as probable, in the sense of being more likely than not to happen. But some certainly seem more likely than others.

I’ve organized the candidates into three “tiers.” So let’s consider our candidates, from Tier 3 (least likely) to Tier 1 (most likely). Who tops the list?

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There’s an adage in journalism called Betteridge’s Law of Headlines. Named after Ian Betteridge, a British tech journalist who wrote about it in 2009, it states: “Any headline that ends in a question mark can be answered by the word no.”1

Perhaps the editors of Semafor had Betteridge’s Law in mind when they decided to run an article on Sunday afternoon from business reporter Rohan Goswami under the title “Paramount weighs leaving California over Warner Bros. rift.” Goswami’s piece can be fairly summarized by its lede paragraph:

Unlike Goswami, I have the liberty of choosing my own headlines and deks here.2 And I very much had Betteridge’s Law in mind when I posed the question at the top of this post: is Paramount really going to leave California to get its acquisition of Warner Bros. Discovery done?

No. But the fact that we’re even having this conversation is very much the point.3

Over the last few years, a lot of reporting and analysis about the entertainment industry has relied on the metaphor of a “house on fire.” Perhaps a more apt metaphor for our business would be a “theater on fire.” Which makes this article the journalistic equivalent of running into the auditorium and yelling:

As of the publication of this post — less than 24 hours since Goswami’s article dropped — I’ve been contacted by eight different friends, colleagues, and contacts for my take on the Semafor piece. And in those conversations, I’ve encountered reactions representing at least three out of five of the so-called “Five Stages of Grief” popularized by Swiss-American Elizabeth Kübler-Ross.

There has been anger. There has been denial. There has been depression.

But I think this news story is about one thing above all others: bargaining.

And the four reasons why I believe that can be found right in the Semafor article, and in the circumstances immediately surrounding its publication.

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1. The Article Doesn’t Match the Headline

Let’s go back to the specific title of the Semafor piece that has the town so abuzz: “Paramount weighs leaving California over Warner Bros. rift.” But is that actually what the article says?

Digging into the full text, and paring away the context and speculation, I can identify two bits of “news reporting” that are broadly consistent with the headline (which appear in the very first two sentences):

• “As California tries to derail Paramount’s $110 billion takeover of Warner Bros. Discovery, Paramount CEO David Ellison’s friends and advisers have been pushing the media executive to consider shifting his business out of the state.”

• “Ellison’s confidantes have pushed him to consider moving its corporate headquarters and reallocating much of its $30 billion in planned spending outside the state if California Attorney General Rob Bonta were to sue to stop the merger, according to people familiar with the discussions.”

To even describe these statements as “broadly consistent” with the headline is a bit generous on my part. All this article really says is that “People are telling David Ellison to think about moving the company.”

So is Paramount actively considering the prospect of leaving California? Maybe. The headline certainly suggests as much. But the article never actually says so, nor does it identify anything that Paramount or its leaders are actually doing to assess or prepare for a move. The reader is simply left to infer that Paramount is actively considering the prospect.

This should be your first indication that this “news article” might be more laundered company-issued publicity than actual reportage.

2. The Sources Paint Ellison as the Reluctant Hero

The next clue that Semafor’s article is more buffed-and-shined press release than meaningful journalism is the subtle reality of exactly what statements or intentions are (and are not) being attributed specifically to Ellison — who is as much an individual human stand-in for Paramount as any single individual can be considered for any company in the industry these days — as opposed to “friends,” “advisers,” or “confidantes”:

• “For his part, Ellison remains wary of the idea of leaving California, some of the people said — he relocated Paramount’s corporate headquarters from New York to Los Angeles after his original deal to purchase the company closed last year, and has spent most of his life in California.”

That’s it. That’s the whole list.

To the extent the article purports to reveal anything about the thinking of Ellison or other actual decision-makers at Paramount, we get the following:

• “Privately, Ellison and other Paramount executives have expressed frustration at [California Attorney General Rob] Bonta’s refusal to engage” with the company on negotiated concessions that Bonta would accept in order to drop his objections to the deal.

• “But Paramount believes Bonta’s office has rebuffed its overtures, creating what one Ellison adviser said is an ‘inhospitable’ environment for Paramount to operate in.”

So, divorcing the article from its provocative headline and taking its text at face value, Ellison doesn’t seem to be doing much “weighing” at all. To the contrary, we are told only that he doesn’t want to do something so drastic. It’s those dastardly friends, confidantes, and advisers who are in his ear!

This is what a smart, deftly executed publicity strategy looks like. Nothing controversial is attributed to Ellison, or to any other executive of the company — only to the outsiders. Readers are given space to infer and speculate themselves into a tizzy, while Ellison himself is positioned as a reluctant and put-upon leader who isn’t keen on any of this, and who has total plausible deniability. You can already imagine Ellison reassuring an anxious industry community, “Hey, I never said anything about moving the company! I’d never want to do such a thing. I just want that damn Rob Bonta to call me back so they can figure it out like grown-ups!”

3. Timing Is Everything (or, “Don’t Talk About That; Talk About This”)

You also can’t read this article in a vacuum. Rather, you have to look at it in the context of when it was released, and what else was in the news over the last two days.

Paramount’s departure from California would certainly qualify as Very Bad News for the industry. And companies tend to drop (or work very hard to persuade journalists to drop) Very Bad News on Fridays, in hopes that it will be largely missed and forgotten by Monday. This article came out on Sunday afternoon — timed perfectly to allow it to dominate industry conversation this week.

And why might Paramount want this to be the story on everyone’s minds this week?

I’d wager that it’s because, if it wasn’t, everyone might instead just be talking about Sunday’s report in the New York Times that “[s]tate attorneys general are said to be getting ready to file a lawsuit as soon as this week to halt the $111 billion deal.” But only until that was superseded by discussion of this morning’s filing of the promised lawsuit, a showy press conference in the shadow of the iconic Hollywood sign, and an accompanying press blitz from the CA Attorney General’s office.

Paramount and its leaders understand full well that the industry community is, at best, deeply wary of its imminent merger with Warner Bros. Discovery. Once Donald Trump’s Department of Justice fulfilled everybody’s most cynical expectations by announcing its decision not to oppose the merger (or even to extract some nominal concessions from the company in exchange for its approval), many had turned their attention to Bonta as their Last Great Hope for blocking it.

You’d be hard-pressed to find anyone in Hollywood who is especially happy or optimistic about the prospect of “WarnerMount.” But there are plenty who have been willing to begrudgingly conclude that, in a world in which the only plausible alternatives were for Netflix to buy Warners (memorably called “the death of Hollywood” in one piece from the few weeks when that appeared to be happening) or Warners and Paramount both slowly withering and dying in the face of the Netflix/Amazon/Apple onslaught, Paramount acquiring Warner Bros. Discovery was “the best of the bad options” (at least for some constituencies).

Semafor’s report is a megaphone through which Ellison and his partners can subtly half-reassure/half-warn those who know they hate this deal but are still on the fence about whether to actively oppose it: “This deal is fine. And if you think you want Bonta to block it? Just know that it could get worse. It could get so much worse.”

4. Don’t Bet on Outcomes in Which Everyone Loses

The best reason to assume that Paramount isn’t seriously entertaining leaving California is because, in short, it’s an outcome that literally no one wants.

Skeptical as I am about that Semafor article, I fully believe its suggestion that Ellison himself would not want the price of his prize to essentially be his banishment from California, and with it, exile from the social and cultural power center of the industry.

First, there’s the personal factor for Ellison, whose individual aspirations toward industry moguldom are, I have argued, an important frame for understanding what he and Paramount are doing. I can tell you from personal experience that a five-minute stroll down the Paramount Lot’s historic Paseo between one’s parking space and office is one of the greatest perks of working at that or any other company in Hollywood — one that I felt so strongly about during my years there that I commissioned local artist Andy Bauch to create a 3’ x 5’ landscape of the gate out of 19,083 Lego bricks (an image of which appears at the top of this post). I’m no mogul, but taking that walk, strolling through that gate, is enough to make almost anyone feel like one for a few minutes.

I don’t think Ellison would feel like all that much of a mogul taking his morning stroll on the New Jersey boardwalk or through tourist-ridden Times Square.4

At the same time, while the Semafor article holds up Chevron, Oracle, and Tesla as examples of mega-corporations that abandoned California for the most “hospitable” regulatory environment of Texas, it’s hard to believe that other major executives in our industry would feel as sanguine as the leaders of those companies about moving to Texas or New Jersey.

Admittedly, it’s unclear how much of the company’s operations, and how many of its key leaders, would have to travel with the corporate headquarters as part of this transition.5 But the mere fact of it would be a devastating psychological wound to the industry — one that would come with real consequences for the company’s future success. Reports have already started trickling out that some creators and talent with enough options and market power to be choosy have shied away from working with the company, and especially with Ellison’s controversial hand-picked chief for CBS News. Paramount’s key partners are far more likely to punish the company for its defection than the people and companies that do business with Chevron (for which oil-rich Texas is a natural home), Oracle (which joined an already growing tech community in the state), or Tesla (whose CEO Elon Musk has gone all-in on Texas more generally). Already living on a razor’s edge of industry/creative community sentiment, I have to think Ellison and his team would be very concerned that winning the deal and losing the state would prove to be a Pyrrhic victory in the long run.

Meanwhile, California Attorney General Rob Bonta doesn’t want to be the politician who drove not one but TWO legacy studios out of California any more than Ellison wants to be the CEO who left with them. I don’t question the sincerity of Bonta’s concerns about and objections toward the Paramount/WBD deal. But I also don’t doubt that he is acutely aware that he is playing a game with tremendous political promise and peril. If Bonta can bring Paramount to heel, he might start drawing up designs for his office in the governor’s mansion in Sacramento. If he fails to block the deal, and in the process drives Paramount and Warner Bros. to one of the 38 states (including Texas) that haven’t sued to block it, he’s more likely to be looking at floor plans for his window office as “Of Counsel” at a large corporate law firm in San Francisco.

Which is why I’m sure that, if Bonta has been a reticent and unresponsive partner to Paramount in negotiating concessions in exchange for dropping his opposition to the deal, it is only because he has wanted to negotiate with as much leverage as possible. This morning’s filing gives him that leverage.

Now the real negotiations begin.

I’m not usually the type who tries to understand the world in terms of fables and fairy tales. Even so, I can’t help but think about the industry’s reaction to last Monday’s announcement by Comcast, that it planned to spin off NBCUniversal and Sky into a new standalone publicly traded entertainment and media company, in terms of one of the most famous fairy tales of them all: Goldilocks and the Three Bears.

Last week’s post was my response to the industry’s Mama Bears — those whose reactions were, in my opinion, a bit too cold or too soft for news that marks the beginning of what I think will prove to be lasting and transformational change for the industry (and certainly, at the least, for two of its most historic brands in NBC and Universal).

Today’s post addresses the Papa Bears — those who strike me as running too hot, too stiff, making too much of the news.1 In some cases, it’s trade press editors wildly overextrapolating in search of an attention-grabbing headline. In others cases, I see industry lifers too jaded by recent experience to take any news at face value. And really, I’m no less cynical than they are — I just land somewhere a bit more nuanced.

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NBCU Spinoff Overreaction #1: Bigger Is No Longer Better!

One headline I’ve seen stands above all others in capturing the trade press’s thirstiness to squeeze a big headline out of this story. Care of Deadline on June 30 (the day after Comcast’s announcement):

You hear that, everyone? Now that we think about it, there was really no reason for the industry to have contracted from six major studios to (soon) four, or from eight premier streaming services to four or five or however many we end up with. Were we saying bigger was better before? Just kidding! Sounds like we won’t have to worry about several more years of ever-churning M&A&S2 activity after all.

Don’t get me wrong: I’m not here to sing the praises of corporate consolidation. I’m on record as being deeply skeptical of these big combinations — not least because, in my own experience at major corporate conglomerates like Amazon, Sony, and pre-Skydance Paramount Global, I saw firsthand just how bad all of these companies were at promoting collaboration and unlocking value across intuitively complementary business units. “Consolidation” and “efficiency” are stories that sell well to investors, but are seldom actually operationalized effectively.

But that doesn’t mean that the spinoff of NBCU and Sky into a standalone unit — in essence, their vertical de-integration from Comcast’s broadband/pay TV business — signals a broader reconsideration by investors and corporate leaders of their obsession with scale as a business strategy unto itself. Rather, it just reflects an ongoing pendulum swing, in both market sentiment and regulatory focus, between horizontal and vertical integration as the leading models of corporate strategy and growth. Bigger is still “better.” The question is: what kind of bigger?

“Bigger” Like Wider, or “Bigger” Like Taller?

To start, let’s define two common and familiar terms that are essential to understanding not just Comcast’s decision to spin off NBCU, but our industry’s ongoing obsession with consolidation and scale more generally: horizontal integration and vertical integration.

“Horizontal integration” refers to the combination of companies that are in essentially the same business — i.e., competitors buying competitors so that they can increase their revenue through the exercise of greater market power, and reduce their costs thanks to “eliminating redundancies”3 and achieving economies of scale. “Vertical integration” refers to the combination of companies that are separate links in the chain by which products and services are created and brought to consumers — a company buying its own suppliers or distributors in order to “maximize efficiencies” and capture the profit available at each link in the value chain.4

In the context of the entertainment business, then, a movie studio combining with another movie studio with more or less the same business is an example of horizontal integration; a movie studio acquiring physical studio production spaces or a theatrical exhibition chain is an example of vertical integration.

A Trip Down Antitrust Memory Lane

The foundational American antitrust statutes of the Progressive Era — the Sherman Antitrust Act of 1890 and Clayton Antitrust Act of 1914 — were enacted in an effort to rein in massive horizontal combinations such as Standard Oil, U.S. Steel, and American Tobacco, which exercised overwhelming market power within their respective industries as a result of their extraordinary scale.

Through the end of the 1920s, in the face of a legislative and regulatory environment that had become increasingly hostile toward horizontal trusts, American businesses pivoted toward vertical integration as the next big thing in corporate consolidation. In Hollywood, this took the form of the so-called “Studio System,” in which the industry’s major powers each owned and controlled all of the steps in the chain of film production, distribution, and exhibition.

The New Deal swung the political climate back against corporate concentration, with a new skepticism toward vertical integration in particular. In the entertainment industry, this shift culminated in the U.S. Supreme Court’s landmark decision in 1948’s United States v. Paramount Pictures, which effectively dismantled the “Studio System” that had dominated the 1920s, 30s, and 40s.

Throughout the 1950s and 60s, an obviously hostile political, legal, and regulatory posture toward both horizontal and vertical combinations resulted in the agglomeration of large, diversified conglomerates without any obvious corporate efficiencies — think Gulf + Western Industries, which grew from a 1934 auto parts maker into a massive empire of over 100 businesses spanning mining and resource extraction, film and TV production, cigar manufacturing and distribution, and more.

By the 1970s, however, the so-called “Chicago School Revolution,” driven by the scholarship of Judge/Professor/Crank/Supreme Court Reject Robert Bork, reimagined antitrust law as essentially indifferent to any corporate consolidation that didn’t obviously result in higher prices or reduced choices for consumers. During the Reagan era and beyond, the predominance of this theory of antitrust created a permissive legal climate toward consolidation, especially vertical deals, which eventually gave rise to AOL’s disastrous acquisition of Time Warner, Comcast’s fairly smooth acquisition of NBCUniversal (and, later, Sky), and AT&T’s disastrous acquisition of Time Warner.

Today’s Corporate Consolidation Landscape

The landmark deals that have caused the most consternation in the industry over the last decade — first Disney’s acquisition of most of Fox, and now the pending merger of Paramount and Warner Bros. Discovery — are essentially horizontal in nature. But, unlike in prior eras, the market’s most recent reorientation from vertical toward horizontal combinations doesn’t reflect a shift in legal/regulatory priorities.5 Instead, the market seems to have finally figured out what almost any employee of any of these companies could have told them at any time in the last 20 years:

We suck at this.6

At multiple companies, I worked hard to find creative ways to marshal resources and capabilities across complementary businesses. I did it both because I’m a professional overachiever, and because it seemed cool, and potentially fun, and certainly like the thing I should be doing. I have zero wins to show for any of it.

Even within a relatively coherent large business (like NBCU), different divisions may have vastly and unexpectedly different cultures. (I spent years of my career learning the hard way about the dramatic differences in culture, language, and values between the video game and film/TV industries.) Such differences are often especially pronounced (and impactful) between businesses that come together via M&A activity, rather than developing in parallel organically within an existing organization.

Beyond organizational dynamics, there is also good old fashioned individual insecurity.7 Generally well-intentioned people are often so rattled by the inherent insecurity of working through a major corporate M&A process (often more than once) that they naturally begin to view more distant colleagues less as teammates and more as competitors for finite resources (if not survival).

In the end, I believe there is one rule when it comes to executing on the promise of corporate integration: “Bonus pool is destiny.” Overstressed and undersourced executives will not commit scarce resources (in time, money, or effort) for the benefit of affiliated businesses unless that benefit is somehow eventually reflected in their own compensation (and that of their teams). Undifferentiated bonus pools are controversial, and structuring compensation schemes and effective incentives for collaboration is hard.8

I’ve never seen a company “get it right.” Have you?9

So yeah, maybe there is something to this repudiation of the tempting but unproven theoretical logic of vertical integration.

I don’t believe, as LightShed’s Rich Greenfield argued, that Comcast’s decision was “an admission that there is literally no synergy between Comcast and NBCUniversal.” I just think it’s an admission that they haven’t been any better at “unlocking the synergy” or whatever than anyone else.

And I don’t take it as a sign, as Deadline suggested, that the market has fallen out of love with “bigger is better.” It just means that the market is directing its affection away from vertical scale (which requires harnessing complex cross-divisional strategic and operational efficiencies), and toward horizontal scale (i.e., good old-fashioned market domination). And the best evidence of that might be what happens to NBCU next.

NBCU Spinoff Overreaction #2: This Is Never Going to Happen

What I consider to be the “Baby Bear” interpretation of this news — not too hot, not too cold, just right — was best represented in the press by Puck’s Matt Belloni10: there’s a good chance this spinoff never actually happens.

Recall that, while essentially everyone understood that Warner Bros. Discovery CEO/Hollywood’s favorite Temu Bond villain David Zaslav had all but placed a “for sale” sign on the iconic WB water-tower from the day he arrived, it was WBD’s announcement that it planned to split the company into two parts — a slimmed down Warner Bros. comprising most of the company’s film/TV production and film distribution assets, and a new publicly traded spinoff called “Discovery Global” housing declining linear TV assets such as TNT and CNN. In practice, however, what was presented as the announcement of a corporate split was more like the announcement that the bidding for Warners was, at last, officially open. So began the bidding war from which David Ellison and Redbird Capital eventually emerged triumphant by paying nearly three times the value assigned to the company by the investment markets before the bidding began.11

Comcast was surely well aware of that recent history when it made its announcement, and I have every expectation that, in the weeks and months ahead, they’ll be at least entertaining serious inquiries from buyers eager to take some or all of the NBCU/Sky assets off their hands.

The overreaction, however, has come from those who say that’s all this is — a stealth announcement of a public sale process — and that Comcast has no intention or even desire to actually go through with the spinoff as it has currently been announced. I’ve actually heard some friends and colleagues misinterpret Belloni as making this overreaching version of the argument.

I can certainly understand why people might feel inclined to interpret current events in our industry in the most cynical possible terms. But I view Comcast’s move here as more similar to how I interpret Netflix’s participation in the WB sweepstakes — with confidence that pretty much any outcome leaves them in a better place than where they started. That’s because, whether or not a spinoff is the “best” move for NBCU, there’s reason to think that — even in the absence of a direct sale of its NBCU assets — it’s the best move for Comcast.

At the time that Comcast first announced its intention to acquire NBCUniversal from General Electric in December 2009, and continuing through the completion of Comcast’s multi-stage acquisition in March 2013, institutional investors — no doubt aware of the historically permissive attitude of regulators toward vertical combinations at the time, as described above — were celebrating and rewarding the basic business logic of the deal. Rather than being a lonely piece of an inefficiently diversified conglomerate, as it was at GE, NBCU would now be a key part of an efficient, mutually complementary vertically integrated company. Today, the prevailing sentiment among investors seems to be the one in the quote from LightShed’s Rich Greenfield above: that there is “literally no synergy there.”

All at once, institutional investors seem to have suddenly rediscovered the concept of the conglomerate discount, in which a diversified group of businesses and assets is valued at less than the sum of its parts (usually by about 10% to 15%) due to the conglomerate’s inability to manage various and different businesses as well as a focused company would do. But wait — should we instead apply the conglomerate premium, in which the market values a diversified parent company higher than the sum of its individual business units (because of vibes, I guess)? Or is it that all of this is faux-precise made-up nonsense? I say the latter, but it doesn’t matter — in the Game of Thrones of the American economy, reality is whatever market sentiment says it is.

Thirty years from now, investors might once again embrace vertical integration as the key to smart corporate growth. Today, their opinion can be seen in Comcast’s moribund stock price, which has declined by roughly 60% from its pandemic era high in September 2021 (a period when most entertainment and media stocks were flying high in the months following the widespread rollout of Covid-19 vaccines). And it’s not just Comcast being picked on — Disney’s stock is down by about 45% over the same period.

But again, just because “vertical integration” is out of style doesn’t mean that the market has lost its lust for M&A&S activity generally. It’s reasonable for Comcast to have concluded that, based on prevailing market sentiment, there was simply no way to convince investors to reverse that decline without making a corporate event of it. Whether that event is a spinoff or a sale unfortunately matters less than the mere fact of it being an event. And the institutional investors who have shown so little affection for Comcast over the last five years seem to agree: Comcast shares rose 4.5% on the day of the announcement, on roughly 4x typical trading volume, and then added another 2% the next day (though they have shed most of those gains in the roughly week and a half since).

Comcast likely has other strategic considerations on its mind as well. Comcast’s core broadband/pay TV business has been vulnerable to secular decline, but — at least until recently — somewhat impervious to direct competitive threat. Every merger among its rivals, like the 2016 merger of Charter and Time Warner Cable, meant one fewer competitor seated at the table. At the same time, the incredibly high cost of building and deploying the necessary infrastructure to launch a new broadband or pay TV business effectively deterred new players from sitting down at the table.

More recently, however, the emergence of Starlink — as well as an expanding group of rivals like Amazon Leo that have followed Starlink into the emerging business of delivering broadband Internet access via low earth orbit (LEO) satellites — promises to substantially disrupt the industry and challenge the once-impregnable-seeming fortresses of Comcast and its terrestrial broadband/pay TV kin.

I expect that Comcast is eyeing a combination with Charter as a defensive move against these new satellite-based competitors. Charter, you may recall, ultimately walked away with Time Warner Cable in 2016, after the breakdown of TWC’s initial tentative deal with Comcast. It is currently mid-close on a $34.5B acquisition of Cox, a big move that is also likely informed by looming competitive pressure from Starlink and its ilk.

Divesting NBCU positions Comcast for an easier political and regulatory climate through which to push through a deal with Charter — one that would have been virtually unimaginable in a pre-Starlink world, effectively combining the U.S.’s four largest cable/broadband providers from before the current wave of consolidation began.12 And I’m not the only one who seems to think so — Charter’s stock price jumped by about 10% in the days immediately following Comcast’s announcement of the NBCU spinoff (though it has also since shed most of those gains).

To be clear, I still fully expect that the months ahead will see a flurry of additional potential M&A activity around NBCU. But I believe it would be a mistake to assume that, if a sufficiently compelling offer doesn’t materialize, Comcast isn’t fully prepared to see the spinoff plan through as it has been announced.

So if the bidding for (or by) NBCU is about to begin in earnest, who should we expect to see at the auction? In Part 3, I’ll conclude this series by considering all of the plausible players in the drama to come, and share my sure-to-be-unpopular pick for the potential buyer that I think isn’t getting nearly enough attention.

Like many of you, I’m sure, I woke up on Monday morning thinking to myself, “Gee, has it only been 123 days since the last industry-transformational corporate reorganization was announced?”

How lucky for all of us, then, that Comcast was there to save us the boredom of a 124^th day of relative quiet, peace, and stability, with its announcement that — just six months clear of having ejected most of its inexorably declining (but, for the time being, still quite cash-generative) cable assets into Versant1 — it would spin off its NBCUniversal and Sky units into a new debt-laden standalone publicly traded company (in which Comcast could retain up to a 19.9% equity stake).

My immediate reaction, if I’m being honest, was smug satisfaction, as I thought back to this passage from Part 4 of my Paramount/Warner Bros. series back in March:

In the original post, that prediction appeared immediately following my acknowledgment that my last big prognostication about Comcast — “that I expected Comcast to eventually make a move on Warner Bros., likely at Zaslav’s (repeated) invitation, and possibly to spin off its own NBCUniversal content unit into a newly combined entity with Warner Bros. Discovery that would be loaded with debt taken off the Comcast books” — had turned out to be a big whiff.3

For that reason, I think it’s fair if I now indulge myself in a quick:

Among people without such specific, petty, and ego-driven interests in this news as my own, however, I’ve found reactions to be noticeably more muted, and intriguingly more varied, than we’ve seen with most of the other marquee M&A&S4 blockbusters of the last several years. People are…pretty chill, right? Plenty of speculation, but unusually un-obsessive, with few strong opinions. But, facing a surprisingly placid, fragmented, and disengaged audience during what should be a banner week for ad revenue, I’ve also seen some toasty takes in the trade press that I think fundamentally misjudge the significance5 of what’s happening here.

My prediction about Comcast’s “quiet quitting” from the entertainment industry was included in my four-part series about the Warner Bros./Paramount merger, which ran during The Business of Television Max(+)’s launch week in March 2026. That series featured much of what has come to distinguish this Substack — the discursive footnotes, the willingness to write about prominent people and institutions without concern for the effect on my own future employment prospects, and my unintended habit of turning virtually every topic into a multi-part series.6 So you shouldn’t be surprised when I now say:

Welcome to my three-part series on Comcast’s spinoff of NBCUniversal!

• In today’s Part 1, I’m going to talk about the people that I think are — generally for very understandable reasons, sometimes even for admirable ones — underreacting to today’s news, and why I think they should probably be steeling themselves a bit more for what likely comes next.

• In next week’s Part 2, I’ll turn my attention to the overreactors who think that this news means “medium is the new big” in corporate scaling, before sharing my own opinions of what to make (and not to make) of Comcast’s unexpected announcement. (Preview: I don’t think you’ll be too surprised.)

• And in Part 3, I’ll consider the major candidates to buy or be bought by the newly independent NBCU, and share my best guess for its ultimate fate. (Preview: I think you’re going to be surprised, and that you’re going to hate it.)

NBCU Spinoff Underreaction #1: This Is Fine

Given my prediction in March, I wasn’t surprised by Comcast’s announcement of its plan to spin off NBCU and Sky. I was quite surprised, however, when I checked in with a few friends at Uni and found that the mood there is nowhere near as existential or bleak as I expected (and am used to hearing from insiders at times like this). As far as I’ve seen, employee sentiment has ranged from “Sure, why not, it’s better than getting sold to Netflix” to “Sure, why not, it’s better than buying WB would have been” to “This is fine.”

And yes, of course, that’s “This is fine” with a nod to this timeless Internet classic:

But can you blame the employees of NBCUniversal — or pretty much anywhere else — for kind of being half-dead about the whole thing at this point? It’s hard to find any major company that hasn’t at some point been a potential buyer, or a potential seller, or both. And as I observed in the March post I quoted earlier, an employee who started at Warner Bros. in 1990 or earlier and somehow survived long enough to retire after the pending “WarnerMount” deal closes will have incredibly and improbably survived seven different major mergers and ownership changes with their job intact.^ It’s easy to understand how they end up at a place of “Just tell me when the meetings are where I find out who my boss is, who my division head is, and whether or not I’m fired.”

World-weary as that may sound, I think it’s actually pretty wise for employees to somewhat divorce themselves, both emotionally and intellectually, from grand processes and outcomes that they can’t predict, much less control. That isn’t to say that employees should be indifferent about those processes and outcomes. But it’s also healthy to recognize that, in the face of such chaos and uncertainty, no one really knows which scenario will actually play out best for them in the end — or what “best” will even turn out to mean.

To be clear, though, maintaining a healthy, humble, and sanguine attitude about transformational change doesn’t mean that it isn’t transformational change. Saving the worrying about the impact on you and your business for after you’ve learned what you actually have to worry about is sensible and mature, but the impact will come.

I think there are a lot of plausible final outcomes here — more on that in Part 3 next Thursday — and any number of ways it could turn out in terms of how immediate, dramatic, and traumatic the impacts would be for NBCU and its employees. Prolonged discomfort, distraction, and uncertainty are guaranteed. But how much more uncomfortable, distracted, and uncertain than the recent baseline? Could be a little, could be a lot.

If that sentiment feels disappointingly lukewarm, then let me remind you that, not even four months ago, I addressed the employees of Warner Bros. Discovery in a section titled “To The Employees of Warner Bros. Discovery: I’m Really Sorry but This Is Going to Suck.” You’ve got to admit, it’s getting better.8

NBCU Spinoff Underreaction #2: This Is Good

NBCUniversal has been viewed as a bastion of relative stability over the last several years, and rightly so.9 Its financial condition and performance have been steadier than most, it has never seemed as vulnerable to bigger competitors, or as functionally out of control of its own destiny, as many of its once-proud rivals, and it has never made it past the exploratory stages of any major M&A&S10 transaction.11 That sounds like a company that has a fighting chance out there, right?

The Ankler’s Rich Rushfield has gone even further than “this is fine” — all the way, in fact, to “this is actually pretty good!” I’ve always been struck by the familiar stubbornly hopeful streak running through Rushfield’s frequently acerbic and exasperated commentary about the industry.12 When the industry’s leaders yet again make a decision that proves our worst assumptions about them, he is never surprised, but always disappointed. Even so, I was quite surprised to see that, while he acknowledged an initial reflexive sense of dread, Rushfield optimistically welcomed the return to the market of a genuine, reasonably well-scaled (by contemporary standards), standalone media and entertainment company — fully committed to its own business, and liberated from its corporate ghetto within a broader technology or infrastructure behemoth that has bigger things to worry about on its balance sheet.

But to be optimistic about NBCU’s prospects as an independent company because of its recent relative stability and resilience is to underestimate the extent to which NBCU has owed that relative stability and resilience to its lack of independence.

Simply put, NBCU has been somewhat sheltered from market forces that hit its competitors much harder — including growing investor skepticism/antipathy toward traditional content businesses — because of its position as a subsidiary component of a bigger infrastructure business. Not unlike the cable network businesses that were spun off into Versant, Comcast’s core broadband/pay TV business may be in long-term secular decline, but it still generates large and predictable revenue. And it does so in what has historically been a pretty stable and minimally competitive industry — you might remember that, in 2014, Comcast CEO Brian Roberts defended a proposed combination of Comcast and Time Warner Cable against antitrust concerns by arguing, “They’re in New York. We’re in Philadelphia. They’re in LA. We’re in San Francisco. You can’t buy a Comcast in New York. You can’t buy a Time Warner in Philadelphia. So there’s no reduction in competition in broadband or in television.”13 All of that has substantially reduced pressure on and scrutiny of the performance of NBCU in isolation over the last few turbulent years.

The last thing I want to do is try to convince somebody who is currently feeling happy and confident about the industry to just succumb to the existential dread with the rest of us. But Rich and I clearly have fundamentally different opinions about the benefits of an entertainment and media company trying to “make it on its own” out there, at least as a publicly traded company. As I’ve argued elsewhere, I believe that the realities of the entertainment industry have never held up well against the expectations of institutional investors. Rather, it seems to me that our industry’s most vibrant and celebrated eras have been those in which its major powers were largely owned and operated either as the personal playthings of wealthy moguls14 or as weirdo subsidiaries of much larger diversified conglomerates.15

In other words, I don’t view the severing of NBCU’s relationship with Comcast as breaking NBCU’s chains; I view it as removing NBCU’s corporate security blanket.

Of course, all of that only really matters if you assume, as Rushfield evidently does, that NBCU/Sky’s next phase will be as a standalone entertainment and media company in substantially its current form. But I’m far from alone in doubting it. Rather, I think we will look back at this week’s announcement not as the beginning of NBCU/Sky’s new era, but as the start of a bigger process (and the prelude to a bigger deal) that will truly define what the next era will look like — for NBCU and Sky and their employees, and for the industry as a whole.

Happy Fourth of July! There’s a lot to criticize about the culture of the entertainment industry, but if there’s one thing we should all be able to celebrate about that culture, it’s our collective commitment to turning any 3-day weekend into a 4-day weekend. Possibly a 5-day one. Maybe even a 9-day one? So stay ambitious, folks, and enjoy a well-earned holiday break! I’ll see you next week for Part 2, in which I’ll turn my attention from critiquing those who I think aren’t freaking out enough about this news, to critiquing those who I think are freaking out too much.

In general, I avoid reading comments on Deadline, which should come with a warning badge that says: “The Internet is not real life.” Or at least I hope real life isn’t a teeming mass of fanatics, shitposters, publicists/plants, Kevin Durant-like burner accounts, and occasional poor bastards trying earnestly to make a good-faith point for some reason.

Despite my better judgment, I can’t help but occasionally take a peek. (Doesn’t everyone?) When I do, I’m usually reminded that my default policy is the right one. But every once in a while, I see a comment that is like this one on a story about the defenestration of long-time Amazon Studios head Jen Salke, the day after Seth Rogen’s The Studio premiered on Apple, with its whole story kicked off by a long-time studio head played by Catherine O’Hara going through a very similar experience:

As Max Verstappen would say: that is simply lovely.

As someone whose best life choice1 was to opt out almost entirely from engagement with social media,2 where am I going to find a better one-liner than that?

And while no one should ever make too much of them, Deadline comments can also sometimes reveal an amusingly clear public consensus about certain major executives. You know you’re looking at one of the “good guys” (or gals) when even the wretched hive of scum and villainy that frolics through those comment sections can’t come up with a bad thing to say about them. And likewise, you can get a sense when the only positive comments seem to be the result of a suddenly-deployed astroturfing campaign following a sustained run of unanimously critical (and occasionally gleeful) comments.

I assume that, on some assistants’ email list (or group chat, or message board, or Slack, or Discord, or DM, or whatever it is the kids use), there’s already a “best of” compilation of Deadline comments going around somewhere. But I am not privy to such things (and, most likely, neither are you).

So if I’m going to start featuring the best of this industry on this Substack, I figure I might as well interpret that mandate broadly enough to have some fun with it (and perhaps also occasionally feature a bit of the worst of the industry too, if it’s funny enough and there’s something to learn from it). And I’d like to see if one of you would like to help with it.

I’m looking for a reader to become a very (very) part-time contributor to The Business of Television Max(+), with some kind of take on a “Best of” Deadline comments feature. How frequent should it be? What should it celebrate? How much commentary is involved? I could come up with answers to those questions, but I’m much more interested to see what someone else thinks would be good — so good that they'd want to write it themselves. And for that, I can offer:

• A one-year paid subscription to The Business of Television Max+ (including the upcoming TBOT chatbot feature) for helping me launch this.

• An additional year of Max+ for every 3 months you keep at it — and at the one-year mark, free Max+ for life.

• I’m a reasonably nice person who knows some people and some things. We’ll talk while we’re working on this. Maybe I can be helpful with some advice or introductions, if it seems appropriate.

If you’re interested, please send me an email at tbot.max@gmail.com, telling me a bit about yourself, what you have in mind for the feature, and maybe what compelled you to respond. Because I truly have no idea how many (if any) of you will respond to this, I don’t know what the process will be from there. But I promise to reply to you (in a non-perfunctory way) no matter what!

Or Help Me Out With Considerably Less Effort: Take a Survey

Looking for a lighter-touch way to help out (and get at least $40 of value for 5 minutes of your time)? Help me make The Business of Television Max(+) better by filling out a quick reader survey, and get two free months of The Business of Television Max on me.

Start Survey

Current Max subscribers will automatically receive two free months applied to their subscriptions, and will receive one month of free Max+ access, applied starting on the launch date of the upcoming TBOT chatbot.3

If you’re not a current subscriber, then take the survey and subscribe now to get your two free months of The Business of Television Max. In fact, if you’re still reading this, I trust you so much that I’m just going to give you the link for the 2-month free trial right here and now, totally on the honor system:

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I’m obviously going to be able to tell if you sign up using this link without having submitted a survey. It’s fine. No one will know but you and me.

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When I was an executive at Sony Pictures Television, during the heady and irrationally exuberant early-to-mid-Streaming Wars era, things may not have been as cushy as they were for the generation of execs that immediately preceded me (with their car allowances and their generously sized offices), but the job still came with some perks. One of those was…

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I know what you’re thinking: finally, someone in the entertainment industry is writing on the Internet about artificial intelligence!

But bear with me! Because I think that there is one aspect of AI’s impact on the entertainment business that somehow remains genuinely — and dangerously — underdiscussed.

Most public debate/panic about the potentially existential threat posed to creative industries by generative artificial intelligence focuses on one of two general themes. The first is the replacement problem — the question of what the technology will be capable of in the future, and what those capabilities will mean for the continued ability of human beings to make a living from creative work (and, if they cannot, for the fate of human creativity itself). The second is the AI training problem — that is, how the uncompensated and unauthorized use, at staggering scale, of existing creative works to train AI models is already depriving the creators of those works of fair compensation for their output while, in effect, conscripting these artists and their work as unwitting and unwilling instruments of their own eventual obsolescence.

We’ll come back to those existential questions in my next post.

But right now, I want to direct your attention to how we're already using the technology today is doing quiet damage to the industry of tomorrow. And that starts with acknowledging a different “AI training problem.”

What Do These Ten Tasks Have in Common?

1. Note-taking in meetings and conference calls;

2. Script coverage (i.e., creative review and feedback);

3. Script breakdowns (i.e., identifying and quantifying major production elements such as unique locations, speaking and non-speaking cast, and prop/set decoration requirements);

4. Coverage of newly published books and articles;

5. Collecting and summarizing press coverage;

6. Creating clean demos from “rainbow” negotiation email chains;

7. Drafting and revising deal memos, certificates, and other simple and form-driven agreements;

8. Summarizing key terms such as option dates and other deadlines, granted and reserved rights, credit entitlements, and approval rights across groups of agreements;

9. Reviewing chain-of-title documents and performing basic clearance research; and

10. Standard administrative correspondence and schedule management?

This seemingly disparate list of common entertainment industry-related tasks, which cut across creative, marketing, business, legal, and general administrative functions, has at least two things in common.

First, they are all tasks that are capably performed by — and, in fact, are already commonly being delegated to — existing large language models and other AI-powered tools.

And second, they are all fairly simple but essential tasks that have traditionally (and efficiently) been delegated to young1 entry-level professionals, who effectively learn how the industry works — and figure out not only how to do their jobs, but also what jobs they want to do in the first place — by closely observing professionals working in a variety of professional capacities and contexts and developing core job skills in meaningful but low-stakes circumstances.

That is the AI training problem we should be talking about more.

The Industry’s Other Generational Crisis

Much has been written about the industry’s building generational crisis. As others have noted, Mike De Luca literally started as an intern at New Line and was running the studio at age 27; now age 60, he co-runs New Line’s parent studio, Warner Bros.2 Bryan Lourd and Kevin Huvane were 34 and 36 years old, respectively, when they and (the slightly older) Richard Lovett took over CAA in October 1995; now aged 65 and 67, they remain firmly in charge.

This was once the norm, not the exception. In 1966, Bob Evans became President of Production at Paramount at the age of 36. In 1974, Barry Diller became the studio’s Chairman and CEO at just 32 years old. In 2026, the Ankler’s Elaine Low launched an ongoing series, examining “how Gen Z, millennials, Gen X and boomers are navigating Hollywood’s narrowing path to power and relevance,” called The Disappearing Ladder.

But, just as there is quietly a second “AI training problem” that the industry has largely ignored, there’s also another looming generational crisis we aren’t paying enough attention to — and in this case, one begets the other.

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Bidding wars are where market-defining precedents are made and broken. At the outset of a negotiation, the two words that tell a dealmaker the most about how much (or how little) fun they’re about to have are “It’s competitive.” Aggressive competition for the most sought-after projects, talent, and IP during the industry’s “Streaming Wars” era (roughly 2013–23) upended decades-old dealmaking norms — with consequences that the industry is still reckoning with today.

Winning a bidding war can also be a transformative moment for a company’s future — but whether that’s for good or for ill depends on the deal. Netflix’s aggressive outbidding of its rivals for MRC’s House of Cards set the streamer on its path to dominance in original content production and exhibition. Vivendi’s acquisition of Universal in 2000, widely regarded as an overpay, led directly to the company’s near-collapse in 2002.

Hollywood just loves a good bidding war. And in today’s TV business, A24 — the prestige indie studio whose auteur-driven, aesthetically distinctive films have, in less than 15 years since its founding, earned the company unique and enviable cachet with critics1, investors2, filmmakers3, and audiences4 alike — wins a lot of them.

Last week, the Ankler’s Lesley Goldberg published a piece about A24’s disruptive impact on the TV business, with “fast deals and creator-friendly terms [that] make the studio a favorite among agents, and a headache for everyone else.” Goldberg addresses the question of “How A24 Wins Bidding Wars Beyond Money,” crediting the studio’s success to several factors, including its generous backends, creator-friendly development process, passionate advocacy with network partners, and willingness to contribute additional production funding and marketing resources to support its shows. And above all, she writes, “Speed is the separator.”

How to Really Win a Bidding War

Goldberg offers a robust answer to a very carefully framed question — one in which the words “Beyond Money” do a lot of heavy lifting. Because the main way that A24 wins these bidding wars is with money. Lots and lots of money.

A24 is one of a small handful of independent studios that seek to secure the most sought-after projects by intentionally and consistently offering well above top-of-market financial terms — seven-figure option fees, purchase prices that occasionally tack on an eighth digit, and pilot writing fees that compete with the highest-level feature scriptwriting deals.

That’s not to say that Goldberg’s reporting is inaccurate, or that A24’s creator-friendly practices — especially the speed and decisiveness she highlights — don’t matter. But while I’m sure writers, rightsholders, and their representatives love how quickly the offers arrive, I suspect it’s all the extra zeroes that really win those sellers over.

I also understand that Goldberg’s analysis wouldn’t have been as interesting or instructive had it just been her copying and pasting a gif of Mad Men’s Don Draper shouting “That’s what the money is for!” But while “money wins bidding wars” is about as exciting of a headline as “water is wet,” there is actually something very interesting — and frankly weird — going on here.

How Can David Afford to Outspend Goliath: With Goliath’s Own Money

To win the hottest projects on the market, A24 must outbid the likes of Netflix, Amazon, and Apple, companies worth roughly 100 to 1,000 times A24’s own (already dubiously inflated) value. How do they do it? With their rivals’ own money.

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On Friday, reflecting on the WGA and AMPTP’s unexpected early announcement of a tentative deal for a four-year extension to the WGA Basic Agreement, and with the just-ended Passover holiday, I likened the quick and drama-free closing — a stark and welcome contrast to the experience of 2023 — to the angel of death1 passing harmlessly over our homes this y…

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Last night marked the end of Passover.1 And while schedule-conscious American Jews who prioritize convenience over convention (like myself) might have held their seder on any of the holiday’s eight nights, the industry’s Jewish professionals would probably agree that this year’s Passover peaked on Saturday, when the WGA and AMPTP unexpectedly announced …

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In the hours following Saturday’s surprise announcement — which arrived nearly two months before the WGA’s hard-fought 2023–26 collective bargaining agreement was set to expire, on May 30 — that the WGA and AMPTP had reached a tentative deal on a new union contract, I saw two reactions that struck me as especially representative of how the unexpected ne…

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When people ask me what a business affairs executive does for a living, I usually give them the same answer that most anyone else would: we make deals.

It’s a fine response. It’s easy for laypeople to understand, representative of how we spend most of our time at work, and consistent with how we’re viewed by most of the industry. I once had a boss who proudly referred to his team of business affairs executives as “The Negotiators.” I thought it sounded like the title of a procedural drama on CBS that I would never watch (but would quietly run for seven seasons). But it made him happy, and it spoke to how central the role of “dealmaker” can become to the professional identity of many people who do this work.

Even so, I’ve always quietly preferred a different answer: we solve problems.

That framing reflects my own biases — in particular, my perhaps surprisingly limited love for the negotiation process itself. But it also reminds me that deals don’t exist in a vacuum; they exist to help large groups of people come together to bring something new and valuable into the world. Making a movie or television series is incredibly difficult. Making money on it is even harder. On the long road from nascent idea to successful production, every closed deal is an obstacle overcome — and the best dealmaking tools are the ones that help you clear as many obstacles as possible, as efficiently as possible.

Which brings me, for the fourth and final time, to the 50/50 pools waterfall.

I didn’t set out to write 10,000 words about a revenue sharing structure (especially one that is still found mostly outside of television). But the 50/50 pools waterfall turns out to be one of those rare dealmaking tools that genuinely solves problems — not just one problem, but several of the most fundamental challenges facing any new business that needs to unite the people with the money and the people with the talent. Today I want to show you what those problems look like in the specific context of indie TV, and why this particular tool is so well-suited to solving them.

Indie TV 1.0: Graveyard of Spec Pilots

Although the 50/50 pools waterfall has been a mainstay of the independent film world for decades, it has historically had little presence in the television business. That’s largely because, for most of the medium’s history, there really hasn’t been any such thing as “independent television.”

As I explained last Monday, the bifurcation of financing/production from distribution (with the latter secured only after the former is complete) is what puts the “independent” in “independent film.” But television has long been rooted firmly in the “commission” model, in which pilot or series production commences only after an anchor network has “ordered” it (and committed to pay negotiated license fees, irrespective of how well it comes out). Traditionally, the notion of “independent television” has been regarded by most industry insiders almost as a contradiction in terms, fundamentally at odds with how shows are actually picked and produced in the real world. Not that that stopped people from trying.

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The best deals — the ones that close relatively quickly and smoothly, and leave both sides feeling equally happy (rather than equally unhappy) at the end — often have one key thing in common: a smart eight-year-old could understand why they make sense.

I call this the “playground fairness” rule: when faced with a range of reasonable positions I could take in a negotiation, none of which seems obviously superior to any other, I generally favor whichever option is easiest to explain and defend — initially to my counterpart, but implicitly to the client they represent — as being intuitively fair and equitable.

Among the many problems with pure “positional bargaining” is that it can go on pretty much forever, limited only by the patience, stamina, and shamelessness of the parties and their representatives.1 The parties know they’re done when they’ve run out of middle ground or are simply too exhausted to continue. But when presented with a position that is well-grounded in basic fairness and intuitive justice, countering it implicitly requires (1) a persuasive argument for why it isn’t actually fair, (2) a specific alternative that can be presented as “more” fair, and/or (3) the willingness to openly violate a powerful and near-universal social norm (that is recognized by, and imposes social pressure upon, even those who don’t personally subscribe to it). If the other side can’t muster any of those three things, then they have little choice but to accept the outcome and move on.

The point here isn’t to be nice (or lazy), even if it means “leaving value on the table” or “giving away the store” — it’s to expedite closing the deal by trying to box my counterpart into an outcome that I know I can be comfortable with, when considering the deal holistically. Allow me to illustrate with an example from just last month:

An indie film producer I work with sought my advice on a deal with a buzzy writer/producer, who my client wanted to partner with on a proposed feature, but who was insisting upon a 75/25 split (in the writer’s favor) of the TBD total available producing fees and backend for the project.2 My client acknowledged that the writer’s name recognition and “cool factor” would be essential to the project’s success. But he didn’t feel great about accepting a minority share of the fees, given how accommodating he had been about paying out-of-pocket for a script — at 200% of normal scale, thanks to the writer working with two of his (non-famous) friends, who would also piggyback on the writer as producers — rather than pushing them to work on spec as so many other indie producers are wont to do. And it didn’t help that my client would have to split his fees and backend 50/50 with a silent partner (who was putting up the money for the writing deal).

But after a few rounds, my client was ready to begrudgingly concede that the deal would never close with the pure 50/50 split that he had contemplated, and now wanted my feedback on his plan to go back with an offer of a 55/45 split. I suggested he should instead offer a more generous 60/40 split. Why? There were actually five parties at the table, not two — my client had his silent partner, and the buzzy writer had his two friends. A “60/40” split was, in reality, a 20/20/20/20/20 split. Kind of hard to argue with that. But I also suggested he limit that 60/40 split to the (higher upside, but much more speculative) backend compensation only, and hold at a 50/50 split of the front-end fees (which would be more meaningful and satisfying to my client and his partner, and could be justified exactly as it had been explained to me).

At this point, you may be wondering…

Isn’t This Supposed to Be About the 50/50 Pools Waterfall We Learned About on Monday?

Yes, I’m getting there. It’s easy to look at the 50/50 Pools Waterfall and just see a complicated accounting construct that only a lawyer could love:

But you can start to appreciate how it passes the “playground fairness” test if you simplify it to six brief statements:

1. Money goes in.

2. Distributors take their fees and expenses off the top.

3. Loans are repaid to lenders with interest.

4. Equity investors recoup their investments with a reasonable premium.

5. Once those who risked money have been taken care of, those who agreed to be badly “underpaid” to get the project produced are made closer to whole.

6. Whatever remains goes half to the equity investors whose money made the project possible, and half to the people whose effort and talent made it worthwhile.

Why Does the 50/50 Pools Waterfall Feel Intuitively Fair?

At this point, you’re probably starting to feel the basic logic and equity there, even if you can’t yet put your finger on exactly why you’re feeling it. So let’s look at exactly what makes this model so appealing.

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Slight publishing schedule rearrangement! My post on the playground magic of the 50/50 pools waterfall will go out on Monday. Today, I’ve got a still-on-topic post that doubles as the debut of one of the exclusive features enjoyed by members of this Substack’s premium tier, The Business of Television Max+: my special series for practicing lawyers and business affairs executives who want the deepest, most practical advice they can get about how to do their jobs at the highest possible level. I call it Doing the Job.

Doing the Job posts give you the kind of nittiest-of-the-grittiest guidance about the real work of being a studio lawyer/dealmaker that you could only otherwise get from an uninterrupted half-hour one-on-one meeting with a very supportive (and undistracted) boss.1

And how do I manage to do that in blog format? In two simple steps:

1. Copying and pasting excerpts from my personal archive of go-to contract forms, actual negotiated deals, and even real-life work emails to both clients and counterparts;2 and

2. Annotating them to the gills to extract meaningful lessons, explain technical terms, and reveal the hidden choices and rationale behind the specific words and phrases I used (and some of the ones I didn’t).

This first-ever Doing the Job is the second post in a three-part series dedicated to a classic revenue sharing structure from the independent film world: the 50/50 pools waterfall. On Monday, I led you through the waterfall, step-by-step, from the first dollar of revenue earned to the last point of Net Proceeds paid. Next Monday, I will (finally) break down why this revenue sharing system feels so intuitively fair and explore what makes it such a potent and flexible dealmaking tool. Today, I’m going to show you the default language that I use in my own deals to capture the 50/50 pools waterfall — which I developed for (and in collaboration with) one of the leading producer/financiers working in “indie TV” today — and reveal why it’s written exactly the way it is (and what changes you might use to make it your own).

To give readers a sneak peek of what they can get from my Doing the Job posts, this first one is going out to all The Business of Television Max subscribers by email, and will be available to all subscribers on the site for a month. (After that, it goes behind the Max+ paywall for good, but your emails are yours to keep forever, and feel free to forward them.)

Already a The Business of Television Max subscriber and like what you see? Upgrade to Max+ by the end of next week to receive your first year’s premium membership for $300 — 40% off the usual annual rate. (Annual subscribers receive a credit toward their new Max+ membership for the unused portion of their current subscription. Offer expires at 11:59 p.m. PDT on April 5, 2026.)

Not a Max subscriber yet? Sign up now for a 7-day free trial, which will let you see not just the full text of this post, but also my Glossary of Industry Terms, specially designed Scale Cheat Sheets, and everything I’ve written for The Business of Television Max(+) to date, including my four-part series about the Paramount/Warner Bros. merger (check out part 1 now without a subscription), my two-part series about why bullying negotiation tactics don’t really work (and how you can make sure of it), and my full three-part series about the mechanics and magic of the 50/50 pools waterfall that we are about to dive into…

Definition of “Net Proceeds”

“Net Proceeds” means any and all amounts received by or credited to3 Producer on a non-refundable4 basis in connection with the Project and any sale, license and/or exploitation of any kind thereof5 (in any and all media now known or hereinafter devised, in any and all languages or versions, worldwide, in perpetuity)6 (collectively, “Gross Receipts”) remaining after deducting:7

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Ask any negotiator in the entertainment business what substantive topic they most hate dealing with, and you’re likely to hear one answer more than any other: backend.

Despite being one of the most critical and high-stakes topics in any negotiation, backend is also one of the least explained and most misunderstood. A disturbingly large percentage of dealmakers, even highly experienced ones, negotiate backend based on what someone once told them they were always supposed to ask for (or never supposed to give), without truly understanding the practical significance of any of it. Many negotiators can correctly tell you that A is better than B, but not why. Even those who truly understand all of the terminology and concepts often struggle to teach them to others; and when they try, even those who sincerely want to learn can quickly find themselves bored and lost.

I get it. Underneath all the jargon and legalese, backend is a formula: dollars go in, dollars go out, something is hopefully left at the end, and if so, your client gets a percentage of it. And none of us chose to go into entertainment, or to law school, because we were good at math. If we were, we probably would have gone to medical school like our mothers always wanted us to.

Too bad. Understanding backend is crucial to truly understanding how our business works; mastering backend is one of the things that separates the good dealmakers from the great ones; and really mastering backend means wrapping your mind around a wide variety of ways that it can work.

So join me on a field trip into the weeds, as I take you through a backend model that many TV negotiators have never seen, but all of them should know. That’s because, while it’s as traditional as you can get in the indie film world, it is quickly becoming a preferred tool of the innovators in the emerging business of “indie TV.” Not only that, it might be one of the most elegant solutions for any business context where the spoils of success must be allocated between those who contribute “cash equity” versus those who contribute “sweat equity.”

You might hear it referred to as “indie net points” or the “indie pools waterfall.” But I usually call it…

The 50/50 Pools Waterfall

Waterfall Walkthrough

Let’s walk this waterfall in a bit more detail, one step at a time. But before we dive in, a quick note about jargon. While I generally try to be sparing in my use of technical jargon (and conscientious about defining it when I do), this piece uses a lot of it (which the subject demands), usually without any explanation or definition (which readability demands). If you don’t know something means, try checking this site’s Glossary of Industry Terms (which I will also link to extensively below).1

With that out of the way, let’s dive in.

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I opened Monday’s post with the story of the first time a talent representative yelled at, cursed at, or threatened me during a negotiation — in fact, it was all three at once! I went on to make my case for why bullying negotiation tactics are not just ineffective, but can often lead to worse outcomes for those who rely on them. But I never described how I actually responded to that first menacing monologue of my career, which culminated with the lines, “I will burn your career to the ground. I will call every boss you have ever had, and every boss you could ever have, and tell them all how awful you are, and that will resonate. So shut the fuck up.”

Today, I’m back to finish my story, and to share four other techniques for countering or defusing hyper-aggressive negotiators. Remember, now and always: not every tactic is equally appropriate for every situation (because context matters), nor is every tactic right for every negotiator (because personal style and authenticity matter too).1 But in this case, all five approaches I describe have two key characteristics in common:

First, they (almost) never involve escalating, mirroring the other side’s aggressiveness or hostility, or even so much as raising your voice. Conflict is a hyper-aggressive negotiator’s comfort zone — they thrive on it. If they can’t immediately intimidate you into compliance, getting you riled up is the next best thing. Why try to fight them on their own terms?

And second, each of these tactics is essentially grounded in the same core principle as judo: ju yoku go o seisu. The phrase literally translates to “softness controls strength,” but the interpretation you’ve probably heard most is “using your opponent’s momentum against them.”

The Dropped Call

The first option is, if not the most common, at least the most commonly daydreamed about by negotiators while actively enduring verbal abuse: just hang up.

As anyone who has been hung up on in a personal conversation can attest, it’s a very disruptive and disorienting experience, as well as a clear and intentional breach of social norms. And that’s exactly why it can sometimes help counter and defuse an abusive negotiator (especially one who is prone to long rants), jolting the screamer out of their flow/fugue state with the wordless yet unmistakeable message: I will not tolerate your complete lack of courtesy, decency, and professionalism any longer; and if you don’t change your behavior, you can no longer expect any of that from me in return.

That said, I’m not a big fan of this tactic. That’s not to say I haven’t tried it (I have); or that it isn’t incredibly personally gratifying in the moment (it is); and certainly, this list would not be complete without it. But I have a strong bias against escalation in any heated situation, and hanging up is a blunt instrument that almost always demands some delicate follow-up to make sure it doesn’t backfire. I’m also wary of any tactic that (1) unless deployed extremely carefully and selectively, can easily come at a cost to one’s moral authority;2 and (2) even if deployed extremely carefully and selectively, can easily come at a cost to one’s long-term relationship with the hung up upon. And, most importantly, I try to stay vigilant about prioritizing what works over what sounds or feels good to me, and I think that the decision to hang up on someone is usually more about the “incredibly personally gratifying in the moment” thing than anything else.

You can think of hanging up as the “control-alt-delete” of negotiation — a “hard reset” that can be used to interrupt a program that has gone rogue, become insensate to new commands, and begun aggressively sucking up all of the computer’s processing power (rendering further productive action all but impossible). As the system reboots, the rogue program’s hold on the computer’s processing power is broken, and normal operations can resume. It’s easy, it works, and everybody does it from time to time.

But any computer expert will also tell you that, as useful as “control-alt-delete” can be, it should be used sparingly (and ideally as a last resort). That’s because it can cause hard-to-detect damage to a computer’s operating system which, while usually minor and perhaps unnoticeable in the moment, can build up and degrade the whole system’s performance over time. By the same token, over- or mis-using “hanging up” can do subtle but lasting harm that can impair one’s effectiveness in the long run (at least with those on the receiving end).

But you’re probably going to try it sometime (if you haven’t already), so I’ll at least offer a few pointers that will help it go better (maybe):

1. Give the other person fair warning that you will hang up if they persist (or, if you’re going to spring it on them unannounced, at least make sure that’s a deliberate choice rather than a reactive one3).

2. Be prepared to answer calmly, truthfully, and respectfully if they call back and say, sincerely or otherwise, “I think the call must have dropped there” (especially if you did not give them any prior warning).

3. Be prepared to answer calmly, truthfully, and respectfully if they call back and start screaming, even more aggressively than before, “How dare you? That’s the most unprofessional thing I’ve ever seen.” (Or be prepared to do what one friend and fellow BA executive did in this situation: promptly hang up again.)

4. If it works, never hang up on that same person ever again. And if it doesn’t work, never hang up on that same person ever again.

5. Try to get this out of your system early in your career.

Stupid and Cheerful

As I discussed on Monday, aggressive negotiators often expect and/or want to be met in kind — shouting matches are their home turf. So if someone is being persistently snide, rude, condescending, or similarly low-key hostile, there is a good chance they are trying to get a rise out of you (which would give them the green light to really go off on you after that).

That is why it can be so confounding to them if you instead respond, with a cheerful lilt in your voice, as though you never even noticed the provocation — just stick to the subject at hand and take on a breezy tone as though this call has been just another part of your absolutely lovely day. When it really works, it’s like a boxer dodging a rainmaker so gracefully that the attacker falls off balance and trips over his own feet.

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