CBS & Time WarnerBy Anthony Rowe

Article Overview • PON released an article that described CBS and Time Warner’s

negotiation tactics.• The article provides information about leverage between companies.

About CBS• CBS Corporation is a mass media company that creates and

distributes industry-leading content across a variety of platforms to audiences around the world.

CBS Channels

About Time Warner• Time Warner Inc. is a global leader in media & entertainment with

businesses in television networks and film and TV entertainment, uses its industry-leading operating scale and brands to create, package and deliver high-quality content worldwide on a multi-platform basis.

Time Warner Channels

Conflict Management• Conflict management is the process of limiting the negative aspects of

conflict while increasing the positive aspects of conflict. • The purpose of conflict management is to enhance learning and

group outcomes, including effectiveness or performance in organizational setting.

Interorganizational Conflict• Interorganizational Conflict occurs between two or more

organizations.• When companies collaborate conflict is likely to occur and the

customers are usually the ones who suffer.

CBS VS. Time Warner• On Oct. 31, 2013, Time Warner Cable reported a large quarterly loss

of television subscribers, the largest in its history: 306,000 of its 11.7 million subscribers dropped the company.

• The bad news had been attributed largely to a disagreement with CBS over fees, which led to Time Warner blacking CBS out of millions of homes in New York, Los Angeles, and Dallas for a month.

Bargaining • Bargain- an agreement in which people or groups say they will do or

give something in exchange for something else

Solution• A dispute resolution agreement reached by the two parties was

viewed as a victory for CBS, they were promised significantly higher fees for their programming in the blacked-out cities, from $1 per subscriber to $2.

Reasoning • The main reason that Time Warner conceded was because they

feared that millions of customers would leave if they were unable to watch football on CBS.

Negotiation• This business negotiation exposes the significant leverage that

content providers have in disputes with distributors. • The drop in Time Warner subscribers is terrible news for future

programming negotiations, other content providers will probably use the same negotiation tactics as CBS.

• “Time Warner played hardball with CBS in an attempt to frighten the network into conceding. But its focus on the pain it was inflicting on CBS blinded Time Warner to fact that it would suffer from the blackout at least as much.”(Shonk, K.)

Summary• CBS and Time Warner encountered Inter-organizational conflict back

in 2013. They used a bargaining strategy to effectively manage their conflict. Reactivation of CBS channels and higher prices for some of Time Warner’s customers was the result of their negotiation.

Questions?• How long was the actual negotiation process between CBS and Time

Warner?• Has there been any more conflicts between Time Warner and CBS

since their agreement?

Works Cited• Shonk, K. (2016, August 11). BATNA Negotiation Example: Find Your

Best Alternative to a Negotiated Agreement and Create Value in Integrative Negotiations - PON - Program on Negotiation at Harvard Law School. Retrieved October 25, 2016, from http://www.pon.harvard.edu/daily/batna/batna-negotiation-example-making-a-bad-batna-even-worse/• http://www.cbscorporation.com/about-cbs/• http://www.timewarner.com/company/about-us• Miller, K. (2015). Organizational communication: Approaches and

processes (7th ed.). Stamford, CT: Cengage Learning.