Packaging Deals in the Entertainment Industry: A Bargaining Approach

Thomas Miceli

No 2020-21, Working papers from University of Connecticut, Department of Economics

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

Pages: 20 pages
Date: 2020-12
New Economics Papers: this item is included in nep-ppm
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