First, I have no inside knowledge of the deal, my observations are from press coverage.
It seems, Love Productions played a, short term, blinder. They used time positively in the negotiation, to convince Channel 4 that they had to move quickly. Channel 4 did, and in doing so increased the risk profile of the deal. It would be interesting to know who in Channel 4 signed off the risk register? Did it highlight the risk of contracting with no guarantee as to the talent?
Two presenters have indicated they informed Love Productions that they would not move. Did Love Productions make this known to Channel 4, or did they omit the fact and expect the buyer to do their own due diligence? Did Love Productions assume that they could throw money at the presenters and they would fall into line? If so they were sadly mistaken.
The BBC were clear they could pay a certain amount and no more. Love Productions saw a bigger pay day with Channel 4 and followed the money. A reasonable approach and as I said they used time as a distinct negotiating advantage.
Love Productions negotiators seem to have adopted a short-term scorched earth approach, in my view. The BBC commercial team will be wary of supporting a Love Production again. Why would you nurture and grow a show into a worldwide brand just to see the people you deal with sell it to the highest bidder? So if Love Productions are to continue with the BBC, they are likely to change out a number of Directors to convince the BBC that they have changed. I would also expect the BBC to require a number of guarantees. Nor, I suggest will Channel 4 be that keen to get into bed with a company that has shown them as poor negotiators. Convincing Channel 4 to buy a format with no guarantee of the talent and thereby magnifing the risks was a very good deal for Love Productions . We have seen, with Top Gear, how these shows rely upon the on-screen talent. So Love Productions in the short term, is more than fine. Love Productions longer term future is questionable, I would suggest.
Now back to the BBC. Well done the BBC, you had a top limit and you stuck to it. Better still the BBC worked with the talent and has kept 75% of them. The BBC will develop other formats, at a lower cost, with a proven team and are likely to have success. I can see a format with Mary setting the challenge and Sue and Mel acting as motivators of competing teams to produce the best version and Mary judging them. One week two WI’s competing the next two Fire Stations etc. Lots of human interest, different locations playing to the BBC strengths.
So what we as Commercials learn is that Channel 4 let time be used as a weapon against them. They seem to have become too focused on doing the deal. This made them ignore price. Did they research what the BBC would offer and offer just above that? It would seem no, given the differences in price offered. What cost and discount did they ask for in taking a programme with so much risk and no guarantees in place for the talent? It would seem none. Hence this seems to be an ego driven ‘do the deal’. As an organisation it would seem Channel 4 failed to have someone with enough authority to stop the deal and tell them “the King has no Clothes”. They built risk upon risk. First moving from the BBC to Channel 4, then not taking 75% of the talent. Then letting the BBC compete directly against them with the 75% of the talent they failed to secure and paying over double for the privilage. Good deal?
This will be an interesting case study when all the facts are known. It seems to show typical business failures that one would hope organisations had learnt to avoid. Thank God they have not, otherwise I would not have a business. Mean while I will continue to enjoy the programme.