Negotiation

Case Study – Charlote Soleil

Party 1- MANAGER OF THE COLKER
THEATER
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PARTY 1: COLKER THEATER

Confidential Instructions for the COLKER THEATER MANAGER

You have worked at the COLKER THEATER for six months. Things have been good and your
negotiation with Charlote Soleil’s agent will be an important challenge. You want to make sure your
boss, the artistic director, will be satisfied with the outcome.

You had a meeting with your boss las week, and put together the following information:

The CT is an institution established in a large metropolitan area. As many other companies, it is a non-
profit organization, financed by a combination of ticket sales, donations from foundations and
corporations. They normally go beyond their breakeven point each year, with a comfortable capacity
of 1000 seats in its theater. The ticket prices vary from €45 to €100, with €55 being a reasonable
average for accounting purposes.

The production of the show, “The Claire Ballet Show,” is scheduled to start in three weeks. The
production is booked for showing for a six-week period with four shows per week. There are three
dancers in the show. The challenging main role is generally considered an honor for young dancers,
even though the character’s age isn’t necessarily specified in the play, it’s more commonly done by
younger dancers.

When the theater announced its schedule for this season, approximately a year ago, Renata Torres was
selected for the main role of The Ballet Show. Mrs. Torres is considered a top dancer, but she hasn’t
yet reached the same level of popularity as Charlote did during the apex of her career. Three weeks
ago, the Colker Theater suddenly took Mrs. Torres off its advertisements for their new show. While it
still is not widely known (no ads are published until the piece is confirmed), the reason for Mrs. Torres
omission is that she had a car accident and will need to operate before the premiere of the show.

The Colker Theater has not been able to find another good dancer that would be available before the
premiere. The dancer in the secondary role (€28,000 salary) knows the main role of Ballet show. She
has a good performance, but she is still a novice in theater and clearly doesn’t have the experience
necessary to play the lead role. The CT finds itself in a delicate situation. The cancelling of the Ballet
Show would result in the loss of hundreds of thousands of euros.
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Luckily, Charlote Soleil, a wonderful dancer, while older, has heard rumors that the piece was in a
crunch and called the artistic director to ask if they had considered the idea of her playing as the main
dancer in the ballet. Until now, the director has not responded, hoping to find a younger dancer.
Unfortunately, it seems impossible now and the artistic director is desperate to hire Charlote. You
have scheduled a meeting with Charlote’s agent.

Charlote Soleil performed in several pieces for the Colker Dancing Theater during a period of two
years, and the last time was over a year ago in a supporting role, also in the ballet, “The Claire Ballet
Show” (€25.000 salary). Five years ago, at the apex of her career, the CT paid €44,000 to Mrs.
Charlote for playing the lead role in “The Claire Ballet Show”. This payment was considered
extremely high during the time, justified by the fact that she was playing the role at the peak of her
career. Moreover, during the last five years, inflation, and the increase in popularity of the show, have
resulted in salaries that are almost double the average that used to be paid, during that time, to lead
dancers.

The policy of CT, generally, is to avoid disclosing the salaries of its dancers. However, because of
these negotiations, we are giving you access to salaries paid by CT, over the last five years, for both
lead, and supporting roles in the piece, “The Claire Ballet Show”.

Time € Main Role € Supporting Role

Five years ago 28,000 14,000

Four years ago 44,000 16,000
Three years ago 35,000 18,000
Two years ago 42,000 25,000
Last year 50,000 24,000
This year ? 28,000

While there is substantial variation from case to case, in general, the CT tends to follow industrial
standards of paying dancers in lead roles double what is paid to those in supporting roles. Also,
following industry practices, the CT has always paid its dancers fixed salaries.

In general, the CT needs to keep dancers’ salaries as low as possible. The average occupancy of the
theater, throughout the year, is 85%. This is also the break-even point. It’s clear that some shows will
be sold-out, but the average will be 85%, give or take 5%. Anything below 80% occupancy would
result in a loss of €100,000 or more, and an occupancy of 50-60%, while rare, would be a disaster.
(These numbers could help explain why Mrs. Soleil has received so few invites for lead roles recently.
While her voice is still great, most theater companies are nervous about hiring her, anxious to avoid,
even the minimal chance, that one day her voice will give out.
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This year, Mrs. Torres received €60,000 for acting in Claire Ballet Show. Due to the emergency at
hand and the strong desire of our artistic director to hire Charlote, the sponsors authorize you to offer
up to €90,000, if necessary. If Charlote asks for more, the CT will have to use an inexperienced,
supporting dancer to fill the lead role, hoping for her to miraculously and substantially improve before
the premiere. (You would certainly not need to double her current salary as a supporting dancer, you
wouldn’t need to pay more than €56,000). You also need to consider the possible adverse effects of
establishing a precedent by paying a high salary to Charlote, in case the information was to get out to
others.

The artistic director wants Charlote, despite being considered too old for the part. The director believes
that with proper makeup and a little luck, Charlote will perform magnificently. In any event, there are
almost no alternatives. As can be expected, the last-minute announcement about the change of dancer
for the lead role could possibly have a negative effect on ticket sales. The artistic director expects,
however, that ticket sales will be positively affected by placing Charlote into the lead role.

Prepare yourself for the meeting with Charlote’s agent.