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Packaging Deals in the Entertainment Industry: A Bargaining Approach

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  • Thomas J. Miceli

    (University of Connecticut)

Abstract

Creation of a television or movie project requires the bundling of inputs—writers, actors, directors—into a coherent package that can be produced and distributed. Traditionally this bundling was done by studios, which then negotiated compensation deals with input suppliers via their agents. In recent decades, however, large talent agencies have increasingly engaged in the practice of “packaging,” which involves creating vehicles for their clients and selling the completed projects to studios. The union for screenwriters has recently challenged this practice as constituting an unfair business practice, arguing that it creates a conflict of interest on the part of agencies. This paper evaluates this argument using tools and insights from the literature on transaction-specific investments and the holdup problem. JEL Classification: L14, L23, L82 Key words: Entertainment industry, packaging deals, transaction-specific investment, holdup problem

Suggested Citation

  • Thomas J. Miceli, 2020. "Packaging Deals in the Entertainment Industry: A Bargaining Approach," Working papers 2020-21, University of Connecticut, Department of Economics.
    • Handle: RePEc:uct:uconnp:2020-21
    as

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    File URL: https://media.economics.uconn.edu/working/2020-21.pdf
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    References listed on IDEAS

    as
    1. Hart, Oliver D & Moore, John, 1988. "Incomplete Contracts and Renegotiation," Econometrica, Econometric Society, vol. 56(4), pages 755-785, July.
    2. Patrick Bolton & Mathias Dewatripont, 2005. "Contract Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262025760, December.
    3. Miceli, Thomas J. & Segerson, Kathleen, 2012. "Holdups and holdouts: What do they have in common?," Economics Letters, Elsevier, vol. 117(1), pages 330-333.
    4. Klein, Benjamin & Crawford, Robert G & Alchian, Armen A, 1978. "Vertical Integration, Appropriable Rents, and the Competitive Contracting Process," Journal of Law and Economics, University of Chicago Press, vol. 21(2), pages 297-326, October.
    5. Victor P. Goldberg, 1976. "Regulation and Administered Contracts," Bell Journal of Economics, The RAND Corporation, vol. 7(2), pages 426-448, Autumn.
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    More about this item

    Keywords

    entertainment industry; packaging deals; transaction-specific investment; holdup problem;
    All these keywords.

    JEL classification:

    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media

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