Overview

In this negotiation exercise you are taking on the role of the manager of Live8 Galleries.Please read the information below to learn about the situation you are facing, and an opportunity that has arisen.After, read the instructions for completing the negotiation exercise.

The Situation

After graduating from business school ten years ago, you directed a non-government organization (NGO) promoting civic involvement and urban renewal in Istanbul's poorest areas. The work was hard and your efforts were always underappreciated, but every bit of change you were able to bring about made it all seem worthwhile.

Then, a few years ago your world changed. The earthquake that destroyed huge sections of Istanbul, killing thousands of people and leaving thousands of others homeless, affected you deeply. Although you and your family made it through the quake safely, the period feels like a blur. It seems as if you never slept, working first in rescue efforts and then in reconstruction. Besides the physical stress your job entailed, you felt a great deal of anger towards the government for not foreseeing and preparing for the catastrophe, as well as for hampering reconstruction efforts through inefficient bureaucracy.

This anger was only surpassed by the anger you felt towards the rich countries of the West - the U.S. and Great Britain in particular. While these countries promised aid in various forms, you feel that whatever materialized was always too little and too late. In many situations, your calls to Western government agencies and donor NGO's ended with them making promises that they did not keep. Projects you planned and prepared for had to be abandoned, leaving you to face the angry and disappointed people who had depended on you. After six months, you were completely burned out.

Frustrated by the whole notion of dependency on aid, you decided that people have to work their own way out of tragedy.

The Change

Sooner than you would have thought, you identified an opportunity to put this belief into practice. A group of seven artists, each of whom had lost someone or something - a friend, a relative, a house or an art studio - in the earthquake, were considering opening a joint art gallery. The artistic themes would be those of survival, finding hope in the depths of tragedy, self-dependency and human courage. The artists would individually and collaboratively create artwork in each of their respective media - painting, sculpting and metalworking - and share all profits equally.

These artists asked if you would join the group as an eighth, equal partner, practicing the arts of management: marketing, finance, logistics etc. Excited about the prospect of putting your values into action, you said yes after group agreed to give you full authority and control over all business-related decisions. The venture came to be named Live8, allocating 10% of its profits to a fund dedicated to help other artists take the same step they were taking through giving business loans to new galleries and artistic ventures.

In six years, the venture has expanded from a cramped gallery in Besiktas to six European-style galleries in Istanbul, Ankara and several resort areas, catering to locals and tourists alike. Events such as 9/11 and the Madrid train bombings created international sympathy for your galleries' themes abroad.

Realizing the potential of the export market, you purchased the rights to the Internet domain name www.live8.org. Designed as a showcase for Live8's creations, you put in months designing the site, and it is finally set to go live next week.

The domain name itself cost five thousand dollars, purchased from an individual. You spent another twenty thousand dollars on the design process, hiring an expert web-design artist, and consider this money well spent. You view the website as another gallery, a venue where clients could visit, appreciate - and purchase.

Additionally, you feel almost ready to open branches in Paris, Rome and Barcelona, and the website would provide the chain sufficient exposure to make this possible. Possible, of course, only as soon as you can find the $1.7 million necessary to finance this plan. You could borrow most of the money from banks, or find an external investor, but don't want to place the chain heavily into debt, or under someone else's control.You are hesitant to start off with only one gallery, knowing that the effect of opening all three at once as a Turkish/European chain would have a much more powerful impact.

Live8 Concerts??

Lately, people have been asking you if you were connected to the LIVE8 concerts. Confused, you Googled the term and discovered that it was the name of an event set to take place in two weeks time.

Concerts with leading artists would be held all over the world, and all proceeds - tens of millions of dollars - would go towards combating poverty in Africa.Additionally, the organizers hope that the sheer mass of people sharing in the event will have an effect on the leaders at the G7 summit, forcing them to deal seriously with new proposals for aid to Africa.

You find it ironic that this pro-aid initiative adopted the same name as your own venture, promoting the opposite of your belief in self-dependency. You wonder how much of the aid will actually reach the population it was destined for, and how much will be wasted -just as you saw in Turkey after the earthquake.

Now, whenever anybody asks if your studios are connected to the event, you are quick to tell them "No".

The Opportunity

Yesterday you received an e-mail, from one of the promotors of the LIVE8 Music festival, saying they were interested in purchasing or using the live8.org domain name and asking if you were the owner. You replied that yes, you are indeed the owner and why did they want to purchase your domain name?

Even though you do not agree with pro-aid philosophy of the event, this could be an opportunity for you to financing the money you spent on the website, and maybe even to launch your European galleries.

You are willing to listen. You will need to figure out the following issues:

1. What will it mean for me to sell the domain? Do I have to sell it, or can I lease it? If I lease it, for how long?
2. How badly do they need this, and relatedly, what price should I sell/lease it for?What is too low? What is ideal for me?
3. List and describe each issue you will be negotiating.
4. Why are you negotiating these issues? That is, what are your interests (motivations) in doing so for each one?
5. For each issue (if there is more than one), list your opening offer (these are also your targets) and positions (NOTE: these can be a range).
6. 4. For each issue (if there is more than 0ne), what are your reservation points (what you absolutely will not do, take, or give)?
7. What is your BATNA if the negotiation fails?
8. Please describe what BATNA is.
9. .List and define three (3) power tactics you will use during this negotiation.