Should the big corporations negotiate alongside you and me?

I’ve got my mind on the armada of corporations that are sailing towards our shores lately (see Wednesday’s post), and I started to think about how publicly traded companies, with market caps in the billions, might affect the cost of goods and services in our biz.

Let’s say in 10 years, there are 7-10 shows on Broadway produced by Giant Corps . . . you know, the ones with multiple revenue streams across multiple industries . . . where Broadway and its $15-20mm capitalizations is petty cash.  And let’s say those shows are also brand extensions, and could provide value to the company in other ways, regardless of the success of the Broadway production on its own.

The first question is . . . should those corps negotiate with our unions alongside an independent producer?  Are the playing fields the same?

The independent producer’s investors, who invest in one specific show, have just one revenue stream . . . that specific show.

The corporation’s shareholders have multiple revenue streams, not only across other industries, but most likely for that product itself.

Which one is less risky?

The second question, is what happens to non-collectively bargained rates and services?  This is an industry whose agents, lawyers and managers love to scream precedent and, my favorite, spout an individual’s “quote” (or the highest amount the artist, provider, etc. has been paid).

Should a “quote” or rate paid by a corp be applicable to a negotiation by an independent producer, whose investors live or die by that one show?  (Remind me to tell you about the time an agent asked for an amount for a client and then said, “Well Disney paid it, so . . . “)

One of the reasons that costs continue to go up in our business is that the vendors, artists and service providers all have to price for a “hit.”  They want to make sure if the show runs for twenty years, they were adequately compensated, which I totally get . . . and is a good negotiating strategy.

However, corporations, whose economical model allows them to pay more, because they are in fact getting more, may artificially push rates higher for you and me.

What this means is that the independent producer is going to have to be much more resolute in the negotiation process during the corporate invasion, making sure people know the difference in potential for the individual investor versus the corporate shareholder.

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