Introduction
Negotiations are an essential element of everyone’s lives, and they are studied in various fields of applied study. This approach, for example, requires management technology, communication methods, and confrontation studies in societal and international affairs. Negotiations had traditionally been a substantial element of the professional activity of a small group of diplomats and politicians (Wexler, 2019). As the world grows more accessible and interdependent, the negotiating process has been an increasingly important part of the lives of many people and businesses. There are usually conflicts between opposing perspectives because of disparities in the parties’ interests (Agger and Poulsen, 2018). Educating professional workers with negotiating skills is critical in this respect.
Most people think of negotiation as two parties communicating to achieve an agreement. Discussions are also described as a human interaction aimed at reaching a deal when two parties have similar or disagreeing interests (Weron and Sznajd-Weron, 2022). Negotiations are a sophisticated process in which parties from diverse connections simultaneously employ some influence tactics on one another. The prioritizing of negotiation goals, bargaining strength, the negotiating colleague’s technique, and the participants’ factors toward discussions all influence the strategies utilized during negotiations (Vetschera, 2018). Among the most significant challenges is organizing and managing the whole negotiating process from start to finish.
In 2013, Disney paid 4.05 billion dollars to Lucas, the proprietor of Lucasfilm. Lucas film that is host to the iconic video brand Star Wars that was founded by Lucas is among the globes largest multimedia organizations (Thomas, 2021). It was a win-win arrangement and a mutually beneficial trade agreement for all sides. In exchange for this agreement, Disney bought Lucasfilm, along with its live-action movie making panel, graphics, and visual effects businesses, and set out to emerge a major player in the market. Lucas, on the contrary, was the industry’s only stakeholder and had intention of leaving, but also preferred to continue creating Star Wars larger and greater and be linked with it forever.
He loved the concept of Disney continuing his reputation, and the business told him that he could contribute suggestions and engage on the Star Wars contract. As a consequence, this deal was completed and both parties were satisfied by the outcome of the agreement. This bargain solidified Disney’s spot as a front-runner in animations and excellent films. It also provided them with the ability to earn generously from Star Wars entertainment, which was clearly a lucrative trademark and worked as a pension plan for Lucas (Guerrero, 2017). This transaction united two major brands, resulting in a seamless merger. This work will state the reasons that made the negotiation between Lucas Film and Disney a success. The principles of negotiation theory will be used to outline and explain the whole negotiation process.
Case Description
Iger and Disney were all well ready for the purchase of Lucasfilm throughout the negotiating preliminary stage, with both clear conviction and extensive strategy design. For example, before to the negotiations, he used a significant amount of time researching “Star Wars,” such as the movie screenplays and each character. He viewed the film several times and took copious notes. After putting in all of these efforts to screenplay writing and promising him a role as an advisor on all of the Star Wars movies, Disney finally removed Lucas’s hand-picked screenplay. This has been a contentious issue because Iger’s pledge was only an implicit understanding and not contractually enforceable in the deal.
This agreement may be dated back to May 2011, when Disney CEO and Founder Robert Iger had lunch with Lucas. They had a lighthearted chat as to whether Lucas would actually want to sell his company, given he had recently celebrated his 67th birthday and was contemplating retirement. After that supper, Lucas came to the conclusion that his company’s deal was unavoidable. Then he promised Iger that if he made the right decision, he would be pleased to move his company to Disney. In June 2012, Lucas called Iger to initiate negotiations.
After one year and five months of negotiations, Lucas agreed to Disney’s company acquisition plan, anticipating that it would suit both his investment objectives and the Star Wars film franchise’s development possibilities. As a consequence, Iger arranged for Lucas to accept the pact at Disney’s Burbank headquarters at the end of October 2012. On October 31, Disney completed the establishment of Lucasfilm. Disney has already published a series of Star Wars movies as well as a host of other merchandise after the acquisition.
In 2013, Walt Disney paid $4.05 billion to George Lucas, the owner of Lucasfilm. Lucasfilm is the headquarters of the iconic media brand Star Wars, founded by Lucas personally, and has been one of the nation’s most prominent film and television organizations. It was a win-win arrangement and a mutually beneficial trade agreement. In exchange for this agreement, Disney bought Lucasfilm, its live-action movie production, art, and video production businesses, and became a significant player. On the other side, Lucas was the firm’s only stakeholder and had pension arrangements, but he also preferred to continue creating Star Wars larger and is linked with it forever.
He loved the concept of Disney continuing his legacy, and the business told him that he could contribute thoughts and functioning on the Star Wars authorization. This bargain solidified Disney’s position as a frontrunner in motion graphics and excellent films. It allowed them to earn substantially from Star Wars channels, a cost-effective product and functioned as sequestration savings for George Lucas (Ambasciano, 2021). This transaction conveyed together two main kinds, resulting in a unified merger.
In a Disney press briefing following the agreement, Lucas expressed his delight in passing on his “brainchild” to a modern filmmaking trend. Lucas saw this contract as permanent and binding, and he intended to get much more out of it: entrust the franchise to trustworthy hands while receiving the necessary compensation. As a result, reinforcing the BATNA increases its worth in the perspective of its counterparties (Kilgour and Vetschera, 2019). That would be an essential lesson for all negotiating teams.
During the deliberations, Disney CEO Robert Iger attempted to defend the position of the organization that Disney would make the final choice on any prospective movie franchises. It was hard since Lucas was accustomed to having complete control over all areas of Star Wars. Even though the agreement’s provisions included collegial judgment calls, Lucas acknowledged that Disney had completely controlled Star Wars. Lucas put off transferring his Star Wars narrative advancements to Disney until the last series. The transaction was finally consummated, and Lucasfilm was traded for $4.05 billion, including licensing rights.
Individuals get an edge in negotiations by properly constructing their BATNA. If the deal fails, the most outstanding negotiators get the intended result while recognizing their options. Even the finest BATNA might lose its strength after the contract is signed. Lucas’ Star Wars and his powerful BATNA have been abandoned. The deal sounded expensive, but Disney paid it off within a few centuries, and George Lucas emerged as America’s wealthiest superstar. According to Lucas’ public pronouncements, he was grieved and frustrated since his hope that filming would continue under his direction was not realized.
After some time had passed, Disney chose to exercise his authority and alter the Star Wars plot. What transpired was what Lucas feared: Star Wars deviated from the creator’s original vision, and intellectual command was abandoned. This is an illustration of how anticipation in talks can sometimes be unwarranted. Without a doubt, Lucas recognized that his actual impact on the Star Wars universe would most likely diminish in the future. His steps to bolster his BATNA were the most effective bargaining strategies (Malyshkin, 2018). This enabled him to sell his firm for a ridiculous price while also gaining access to the filmmaking process. Even though Lucas was willing to sell his firm, Chairman Iger’s endeavors to conduct negotiating sessions ultimately convinced Lucas to sign up the franchise to his company and Star Wars to Disney.
Concepts and Theories of Negotiations
International economic and political agreements are designed to solve reasonable and practical issues, with a primary focus on collective interests, but they also have an emotional background. In conversations, desires, intertwined cunning machinations, clashes of personality, and goals abound. Negotiating contains a depth of feelings that are sometimes overlooked or ignored. Bargaining is the art and science of establishing compromises in the communications process (McDonagh and Haberman, 2019). As a discipline, global diplomacy theory should answer challenging topics. For instance, in a dispute situation, it is critical to appropriately comprehend the positions of negotiation partners from various cultures. It is also crucial to know how to make sure that international partners understand each other and reach an understanding when neither side is willing to give up their economic ambitions.
Different thinkers today provide conflicting solutions to these problems. Despite this, everybody recognizes that negotiating IS a unique type of human communication that can and ought to be mastered. However, understanding negotiation methods is a skill that can only be learned through experience (Spiliotopoulos, Makri, Vassilakis, and Margaris, 2020). If foreign diplomacy is considered an art form, it is essentially the artistry of the possibility. It walks a tight line around “persuading” and “winning,” synonymous with danger. A quantitative assessment is how significant risk is determined. Involvement in the bargaining game, like any other, stands to reason because the outcomes are not fixed, giving each player an opportunity. Decision support systems, participatory decision, cognitive science, and settlement analysis are among the underpinnings of contract procurement theory. Architectural Research, Tactical Analysis, Process modelling, Integrated Analysis, and Psychological Assessment of Negotiations are some of the different types of concepts.
Successful Negotiated Agreements require establishing trust in Bargaining Situations. Starting in early 2011, Iger and Lucas undertook personal discussions, as per Iger. Iger confirmed to the Times Lucas’ choice to give up his creative heritage to Disney. There was a great deal of faith. The purchase of Star Wars by Disney demonstrates the need of forming trust when interacting with a formidable adversary. By indicating that Lucasfilm acquisition was worthy of his individual attention, Iger received Lucas’ trust. Iger and Lucas also took a year and a half to complete their transaction. Finally, by included scripts for further Star Wars movies in the agreement, Disney demonstrated to Lucas that it intended to expand on rather than consider replacing his vision.
The battle for commercial and geopolitical domains of control, for wealth and power, is now taking place more in the modelling and simulation realm and taking on new, non-traditional virtual manifestations. The duty of the negotiation is no more to predict the associates’ next move but to comprehend the influence of popular opinion (Ramirez-Fernandez, Ramirez-Marin, and Munduate, 2017). Branding and marketing strategies are frequently more essential than the actual pragmatic steps taken by partners at the bargaining table.
Iger displayed a very good and honest approach during the initial negotiation in 2011, by attentively having to listen to all of Lucas’ demands, including his ambitions and aspirations, without interfering or hurrying to the conclusion. This indicates that Iger used a collaborative (interest-based) negotiating technique instead of a competitive (distributed) negotiation style, which is a much more successful manner of achieving both sides’ goals, particularly when the opposing side is strong (Dalmas, 2018). Iger was also extremely patient and tolerant throughout the negotiations. In reality, Iger negotiated the arrangement over the period of a year and a half to guarantee that Disney was a reliable and determined partner.
Lucas, who was in his late sixties, his main concern was that he planned to retire and devote more time with friends and family. Additionally, Lucas wanted to keep his hold on Lucas film and keep the Star Wars universe expanding. To achieve his criteria, Lucas set a range of requirements as the foundation for the acquisition. Since he had put his entire career into Star Wars, George Lucas simply wanted to sell his company to someone who could run it effectively. He has no reservations about the company’s shift in general.
Discussion and Case Analysis
The Lucas film research project is a fascinating bargaining example that applies the aforementioned notions. It is worth noting that Robert Lucas, aware of the total cost of his product, was concerned about displaying it to the client in the best possible light. Similarly, he wished to retain some rights, including aid in producing new movies and using performers from previous films in current ones (Holmes, 2022). Without question, for many decades, Lucas created a plan of behavior in future discussions and had planned for the purchase of Luca’s film. As a result, he developed a unique selling proposal based on the “knowledge” of negotiating, making his offering the most valued.
Lucas, unfortunately, was unable to affect the total transaction result after considering all probable dangers. He knew that losing possession of the movies was his biggest concern. As an executive producer, he wanted to preserve the capacity to supervise the photography process (Baetens, 2018). This business was an essential part of his existence, and he wasn’t ready to entirely pass it over to the inappropriate people. These promises, however, were not satisfied, as can be observed now. The biggest threat that Lucas feared had materialized, and he was not in charge of film production.
Nevertheless, he was powerless to intervene since Iger adopted a more aggressive stance during the discussions. He reiterated that Disney would make the final selection on future projects. This afforded him some leeway in developing the original Star Wars, as Eger and his team were free to tweak the narrative as they saw fit. Lucas’ ability to engage in movie judgment calls was formalized, and he could join in their debate. Nevertheless, he cannot affect the outcome due to his poorly thought-out negotiating posture.
The influence of the press in the current discussions should not be overlooked. Both organizations’ overwhelming popularity is evident in this context. Consequently, the journalists and the general people are incredibly interested in the fight (Forsgren, 2019). Furthermore, given the state of the World Wide Web, anyone might freely voice their views on this subject. Therefore, discussions involving Disney and Lucas have been a hot topic. The size of the Star Wars fan base adds to the intensity of the battle.
In his discussion with Robert Eger, George Lucas gave all Information and reasons and a detailed analysis of the purchase to Disney. He revealed what authority he desired over the firm and stated that he wanted to do business with Star Wars until the day he passed (Mu et al., 2019). Lucas discussed his goal and offered the best plan of action, which involved handing over the overall company with precise justifications for whatever was not covered. George has stated that he wants to keep ownership since his business is the best at licensing, marketing, and producing Star Wars merchandise.
Given these circumstances, Eger’s most important responsibility was to quiet this multitude of supporters. This was partially essential since when Luca’s film was purchased, these people’s attention was drawn to his effort. This places a significant obligation on him, partly for ethical reasons and partially because the more extensive the population, the more money Disney can make (Han and Melecky, 2017). Lucas also prioritized interacting with the public through multiple channels. He sought to assure his audience after committing to sell the business. He needed to communicate the concept that the movies would stay unchanged. In this circumstance, he was more concerned with questions of public loyalty than with money. Star Wars had indeed played a significant role in his life, and he knew that their supporters must not suffer any losses if he sold the corporation.
As a result, one of the main fundamental factors for Lucas’s lack of a favorable negotiating conclusion is that he sacrificed his objectives and concurred with Eger. This arrangement is advantageous for him; nevertheless, he appears to be the loser by allowing Disney to take all of the ultimate decisions concerning Star Wars. This could suggest a lack of preparedness for the discussions, which is critical to the procedure’s success (Mahase, 2019). Furthermore, throughout the direct discussion, he may not have been firm and sufficient with Disney. Iger’s management of the Star Wars series has continued success in any event.
Conclusion and Recommendations
Disney was able to buy Lucas Film because of a successful negotiation between the two companies. The Lucasfilm CEO was also invited to participate on the Disney movie production segment. This was contributed by the successful negotiation that considered the ambitions of both the parties. The success of the talks was also possible since Disney had prepared well for the whole procedure of acquisition of Lucas film. The trust that both parties had in each other also contributed to the success of the negotiation process.
The scenario depicted here is a clear demonstration of massive agreement talks. It is uncommon and noteworthy, given that the primary item for trade is a long-running franchise with a large fan base. This indicates that there are many persons involved in the business. As a result, the participants must be cautious, make sound decisions, and demonstrate a high sense of integrity and accountability. Because the transaction value surpasses four billion us dollars, the economic aspect of the matter is particularly crucial. This compels both parties to think about every detail of the dialogue so that nothing goes ignored.
Consequently, for example, Lucas fared well financially but was dissatisfied with the ethical ramifications. On the other hand, Eger was ready to recover money while rapidly acquiring complete business control. This reflects his more measured and forceful attitude to these talks. The relevance of risk analysis in these talks should not be overlooked. It is a critical moment in the overall occurrence of bargaining. For instance, if Lucas considered the implications of the arrangement, he might alter his position on the license handover to Disney.
The scenario mentioned appears to be particularly significant for broadly researching negotiations and multinational agreements. Because the deal is so enormous, each decision can have considerable ramifications. The number of resources spent on the endeavour by Disney and the eager audience who observed the procedure unfold was crucial factors in the agreement. The sides were able to perform the business precisely and professionally sufficiently so that both stakeholders benefited and the audience was satisfied thanks to a proficient negotiation technique.
Many individuals believe the transaction between Disney and Lucas was a success. The agreement was a win circumstance for both sides because they benefited from it. This agreement solidified Disney’s position as a leader in graphics and excellent films. It provided it with the ability to earn handsomely off Star Wars entertainment, a profitable brand, and served as a pension account for George Lucas. Both sides were satisfied and bargained in due diligence, adding value to the process.
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