‘Entourage’: A master class in negotiating tactics?

Jeremy Piven as super agent, master negotiator Ari Gold on the HBO television series "Entourage."

Some guy named Taylor W. Bluey analyzed a series of scenes (and negotiations) between “Entourage” super agents Ari Gold and Terence McQuewick term-paper style. The kid is either a junior negotiator or some sort of MBA student, but his analysis of each scene was interesting nonetheless.

Everything in italics was written by Bluey.

A little background: At the beginning of the first scene, Ari runs AMA, a fictional Hollywood talent agency. It is owned, however, by Terence, who has been absent for the last eight years. Ari, for all intents and purposes, has been AMA’s head. Now, at the start of the first scene, Terence wants back in and begins implying over the course of the first scenes (with decreasing subtlety) that he wants Ari out.

Terence’s demands to re-enter the agency also screw with Ari’s years-long plan to open his own agency.

Part One: Information Exchange

Analysis: For the sharp viewer, there’s a lot happening in this scene beyond a surface level exchange between a boss and employee. Standards are being set and information is being exchanged. Importantly, there is some high-stakes gift giving. Where did the exchange begin? Before even one word was spoken.

According to “Entourage” creator Doug Ellin, most entertainment industry agents drive BMWs and Mercedes. Ari, the head of his agency, drives a BMW 745. So when he comes home to find a Bentley Continental GT parked in the driveway, he’s forced to double take. Without a word, the car announces the status, longevity and earnings gap between Ari and his business partner.

Aside from being Ari’s business partner, Terence McQuewick is also his business rival. He founded AMA, the agency Ari has been running for the past eight years. Although Ari is “one of the most powerful men in Hollywood” and runs the place, it’s Terence’s agency. Terence is the boss and ranking partner, and reminds Ari of this fact by ‘staking a claim’ in Ari’s top earner. Sitting there, smoking a cigar with a Bentley parked in the driveway, Terence’s alpha male behavior sends a clear message: He’s the big dog.

Terence further indicates the size of his bankroll by handing Ari a check for $50,000. As Michael Kaplan writes in his book on probability “Chances Are…,” “Your chances in this world are proportional to the depth of your pockets.” Terence’s check is an early signal that if the two were ‘to go to war,’ he would have enough resources to ensure that it’ll be a long one.

Behavioral economists have found that given the opportunity, members of gift giving societies will sometimes reject gifts. The Au and Gnau of Papua New Guinea, for example, reject both unfair and hyper-fair (a division greater than 50 percent) offers in the Dictator Game with nearly equal frequency. The idea is that the recipient sees the gift as not good will, but the bestowal of some sort of obligation as well. We can speculate Terence’s check for $50,000 might be the kind of gift that Ari would reject, given the chance.

Taken off-guard by Terence’s surprise visit and overwhelming presence, we can see that Ari lacks the appropriate ‘game face.’ While he’s usually cool and collected, throughout the scene you can see ‘tells’ and physical illustrations of his uneasiness. Pacing inside his house, he worriedly fiddles with his wedding ring. Shaking hands, Terrence makes a remark about his sweaty his palms. Discussing Vince, Ari nervously scratches his ear. This is not the “Gold standard” of negotiation that we are used to seeing from Ari.

Part Two: Escalation

Analysis: In this brief exchange, Terence signals to Ari that it’s not in just one client that he’s interested — he wants a part of all of them. He pulls this off using normative leverage, described by Wharton negotiation professor G. Richard Shell as “the skillful use of standards, norms, and coherent positioning to gain advantage or protect a position.”

The first form of normative leverage Terence uses is the consistency principle, which is the use of someone else’s standards to advance one’s own argument. By announcing a standard with which he knew Ari agreed — the rule that nobody can enter a staff meeting late — he forces Ari to consider two options: Concede or admit he made a mistake by upholding the rule in the first place.

Terence’s second leverage tactic, using an audience, plays a large part in Ari’s decision to concede and leave the staff meeting. Ari cannot lose face by disobeying his own rules in front of his staff members and is unwilling to say that it’s a bad rule. In the end, Terrence continues to run the meeting and Ari is sent back to his office.

Between Ari and Terence we can already see the breakdown of “affiliation” that negotiator Roger Fisher and psychologist Daniel Shapiro say “keeps us honest, obligates us to search for an agreement of mutual benefit, and makes it likely we will honor an agreement.” The lack of these characteristics will play an important role in later scenes.

Part Three: Declaring War

Analysis: In this scene we see Ari start to put his negotiation strategy into offensive mode. This is the first time he stands up against Terence’s overbearing presence, and is the beginning of the explicit bargaining process between the two. Ari is signaling to Terence that if he wants something, he must be prepared to make some concessions to Ari.

As hinted to in this scene, Ari likes to view himself as a general and his agents as his troops. He takes this metaphor quite literally: He once sent out an assistant to a beach party commanding her to “storm that beach like it’s fucking Normandy!” So where does General Ari Gold conduct his battles? The conference room, which is affectionately known as the “war room” by anyone who works for him. So by arranging a meeting in the conference room, Terence’s request is akin to a formal declaration of war.

According to Frank L. Acuff’s “How to Negotiate Anything with Anyone Anywhere Around the World,” this kind of bargaining over ‘home field advantage’ happens all the time. There are several reasons for this. First, one is more comfortable and likely more confident on their own turf. Second, you can treat the opposing side however you want. Acuff brings up the possibility of treating the other side “like a king or queen, thereby enhancing the relationship,” but it’s likely that Terence and Ari are thinking about the converse — a rickety chair on a lower altitude, perhaps.

Part Four: Opening Offers

Analysis: In the first three scenes, we see Terence build his leverage. If the first, he shows Ari his ‘deep pockets.’ In the second, we see him use normative leverage to build an audience for his return to the agency. In the third, he ‘declares war’ and in this scene we see the two go to battle in the “war room.”

Again, Terence is quick to “cut to the chase.” He’s coming back, and Ari has no power to say otherwise. As established in the previous scenes, Terrence has all the power inside the agency. He reveals his true aims: Terence wants back in the game.

Ari appeals to outside standards to make the argument for an extension on his contract. When Terence says that he’s “always been fair” with Ari, Ari communicates his own of fairness saying, “You were fair with me when you said you were leaving. You coming back is not fair to me, not now.”

Terence dodges the fairness argument by using the same tactic that he used to eject Ari from the staff meeting. He appeals again to normative standards saying, “You know I have a policy never to extend active contracts.”

In the end, Terence combines the normative and financial leverage that he has been building with a new form of leverage: Negative leverage — the power to make Ari worse off. We can see Ari is worried about this and on the defensive. He again shows his ‘tell’ (fiddling with his wedding ring).

Thus far, it’s clear who has done better in this negotiation: Terence is back in charge — effectively demoting Ari — and Ari hasn’t seen any concessions.

Part Five: Sealing the Deal

Analysis: The characters, “born negotiators,” quickly discard the “legal eagles” and get straight to negotiation. When Terence makes his first concession offering ten million to Ari, the two quickly converge on an agreement. This ‘offer dance’ is typical in negotiations pitting two highly competitive bargaining styles against each other.

By preparing to leave after Terence’s paltry offer of four million, Ari is choosing to end the negotiation rather than legitimize the offer and allow himself to be anchored by it. This is the “getting to yes isn’t always best” approach that Max Bazerman and Margaret Neale discuss in their book “Negotiating Rationally.” They explain, “Threatening to walk away from a table is better than agreeing to an unacceptable starting point.” This is a good move by Ari, and one that pays off. At long last we see Ari stand up to Terence.

Using the bluff of deep pockets, Ari leverages Terence’s loss aversion and gets him to settle at a much larger sum than his original offer. Had Terrence called Ari on his bluff and relied on the courts to settle the dispute he could have probably outspent Ari, although such a legal battle would prove to be costly. Instead, a quick resolution emerged and Ari walked away with a handshake and $11 million.

Ari’s already got big plans for the money and was been spotted scouting out some big office space shortly after the meeting with Terence. He’s looking to open up his own agency, the “Gold Standard Agency.”

Part Six: Coalitions

Analysis: Pressured to reveal whether or not he intended to set up shop, we see Ari smartly dodging the majors’ questions. They say, “We’ve been watching you,” so Ari replies “Have you been watching me?” They say, “We know what you’ve been up to,” so he answers “What have I been up to?” They say “Why don’t you tell us?” and he replies “Why should I tell you if you already know?” Ari adroitly employs this technique to avoid revealing any information about his plans.

Terence, sitting at the head of the table, accuses Ari of being a “rat” with a “master plan.” Ari sharply uses this choice of language to wedge Terence’s coalition. “I can only hope that 50 percent of the power at the table is as offended as I am!” he says, looking at his Jewish counterparts. Because people tend to be fairer with people similar to themselves, in bringing up ethnic likeness Ari establishes an ‘in group’ with whom he could apply the similarity principle.

After Ari admits that he’s setting up his only agency, we see a back-and-forth leverage battle between Terence and Ari. By promising to steal only Terence’s clients and agents, Ari realigns his counterparts’ interests and Terence loses some leverage. The group, then, becomes an audience for the dispute between Terence and Ari.

Terence, without the power of coalitions or normative standards, once again must resort to leveraging his deep pockets against Ari. Using the threat of fighting the settlement, he establishes negative leverage and dashes Ari’s hopes of setting up shop.

Part Seven: Commitment

Analysis: While working for Terence, Ari was nervous and vulnerable to Terence’s aggressive tactics. But as Ari broke free from his overbearing boss, he realized that Terence had little leverage against him except deep pockets.

Financially backed against a wall, Ari still manages to keep his wits about him. Again, instead of agreeing to an unacceptable starting point (Babs’ offer of 40 percent) he gives her a sideways look instead. She concedes the offer and changes it to 55 percent — a much better point on which Ari can anchor his counter-offer.

He chooses a risky strategy by making emergency changes in schedule for new agency and asking his agents to go unpaid for six months. The risk, however, pays off as Ari’s former ally offers to finance the project. For the small concession of putting Babs’ name in front of his own — which according to Ari makes it “sound like a beer” — Ari managed realize the idea for a Gold Standard Agency without having to resort to Terence’s money to pull it off.