Contracts and negotiations ensure that both parties agree to and abide by the same set of terms throughout the deal.
Once the ideal celebrity candidate has been chosen and agreed upon in Phase Two, the third step of the Burns Method involves contracts and negotiations. This phase includes drafting the contract, making an offer to the celebrity and negotiating the contract until both parties agree on a final version. This step makes certain that all terms of the deal align with each party, and there is no confusion about what the deal entails.
The first step of the contract and negotiations phase involves drafting an offer. In this phase, marketers work with their agencies and legal teams to draft a well-balanced agreement that is fair, but does not venture too far from the originally discussed scope of work from Phase One. The first version of the agreement should be generated based on the original deal points, and should not put all the cards on the table in order to create leverage during the negotiation process. The agreement should also include added value opportunities that expand relationships and minimize cost, including a pre-negotiated option term, additional usages, territories and media opportunities, charitable tie-ins, sponsorship opportunities and internal requests such as shout-out videos, autographs and memorabilia.
Once the first version of the agreement has been finalized, it must be sent to legal counsel for review. Upon approval, the paperwork can be shared with the appropriate talent parties. Up to this point, the potential celebrity’s agent, manager or publicist should be aware of the project. Regardless, the first proposed offer almost always results in a counter-offer from the talent. Because of this, it is important to know your budget parameters. Making a first offer can be intimidating, but always go in low without being offensive.
After the formal offer has been made and countered, the new agreement will be reviewed and the negotiation process will begin. At this point, the marketers and their associated legal and agency teams can accept changes where agreeable and push back on terms that are not. The new version is then sent back to the talent, and this process continues until a final version is agreed upon by both parties. It often takes multiple rounds of negotiations to reach this point, but all deals vary and timing can be difficult to determine.
Although completion of the contract and negotiations seems like the final step, a marketer’s job does not end once the contract is signed. In many ways, it is only the beginning. Although the terms of the contract have been finalized, the execution must be monitored closely, which moves us into the fourth phase of the celebrity marketing and negotiation process: execution and management.
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