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Smart Alec?

Published: Oct 25 , 2018
Author: Sam Macbeth

The BBC started a series re-run on Sunday called ‘Talking Pictures’ which showcases the careers of famous actors. In this particular episode, the actor in question was Alec Guinness – one of the interviews was originally conducted with Michael Parkinson in 1977.

In the interview, Guinness talked about Star Wars and the now, almost legendary story about the percentage of the film takings he took as fee rather than a fixed payment. Whenever I’ve heard this story in casual conversation, there are normally lots of sagely nodding heads as to the forethought and wisdom demonstrated, taking a cut from one of the biggest films ever.

However, in the interview Guinness admits that he had really no idea as to how successful the film would be - his agent had asked for and got a 2% cut of the film’s success. This was a structured deal that had been agreed in the past with numerous films some of which had unfortunately lost money. It was also a good way of placing a bet, something that negotiators can often do by trading opinions as to the outcome of a yet to be decided event.

You and I may disagree as to the outcome of a future event, and one way to settle the potential dispute that may create is to agree on a deal based on the performance of certain factors. If I were to suggest that my training courses would generate a return on your investment, you may reasonably argue that if they didn’t you should not pay the full fee. I may counter that with that if they did create a significant upside and more than paid for themselves, you would pay me a bonus, what in many businesses is called a PBR, or payment by results.

Back to the story. The day before the film was released in San Francisco, George Lucas contacted Guinness, told him that he thought the film was going to ‘kinda be alright’ and that the press liked it. Additionally so pleased was Lucas with the suggested alterations Guinness had made to the dialogue, that he offered him an extra ½%.

Thank you very much said Guinness, never one to look a gift horse in the mouth!

A couple of weeks after the release of the film (the day on which he watched the film), Guinness spoke to the Producer and asked if the new arrangement could be put in writing. “About the ¼%, yes” said the Producer.

In this age of modern technology, when we negotiate a deal we need a detailed summary at the end to make sure all the details are all correct. Moreover, email your interpterion of specifics to all the other stakeholders for confirmation as soon as possible – a ¼% of a large number, is still a large number!

So two things to think about this week. One option, when faced with an unknown future, is to place a bet on its eventual outcome. The other being to record deals in detail and make sure we are all on the same page as to what the deal actually is.

May the force be with you!!


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Sam Macbeth

About the author:

Sam Macbeth
As a Senior Consultant I advise clients on our training and consultancy and deliver our negotiating programmes. Before joining Scotwork, I was a Regional Manager with a former subsidiary of BP – developing and supplying environmental products and services within Europe, Asia and Russia.

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