Conflict Management

1. CBS & Time Warner
By Anthony Rowe

2. Article Overview
• PON released an article that described CBS and Time Warner’s
negotiation tactics.
• The article provides information about leverage between companies.

3. 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.

4. CBS Channels

5. 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.

6. Time Warner Channels

7. 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.

8. 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.

10. 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.

11. Bargaining
• Bargain- an agreement in which people or groups say they will do or
give something in exchange for something else

12. 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.

13. 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.

15. 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.

17. • “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.)

18. 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.

19. 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?

20. 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.