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MCA Was Out-Negotiated by Its Japanese Suitor

December 16, 1990

In your articles by Tom Petruno and James Flanigan, "Is MCA Smart to Sell Now . . . Or Should It Have Held On?" (Nov. 28), Petruno is probably correct that now is a time to sell if you must. But as Flanigan points out, there was no apparent compelling economic reason for MCA to sell at this time.

With so much indicated value left on the table, Chairman and Chief Executive Lew R. Wasserman, et al., were simply ill-prepared and out-negotiated. Negotiating from a position of overwhelming strength, as MCA did for years, makes for reputation but does not sharpen bargaining skills.

If Flanigan's figures are correct, the results suggest that the MCA team neither set concrete limits nor did it make an effort to assess the real value of the deal to Matsushita.

The buyer's value assessment is critical for determining the bluff-content of Japanese negotiating tactics, which rely more on harangue and walkouts than on the quibbling with numbers to which Americans are more accustomed.

Without a definite negotiating plan, it is very difficult to resist the enormous pressure the Japanese place on their opponents.

Too bad for MCA shareholders; good for Matsushita and Michael Ovitz for the better-played game.

CARL S. HOKANSON

Encino

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