How not to mismange growth

Colors TV channel started a comedy show called Comedy Nights with Kapil. The show, which followed other comedy shows on Star Plus and Sony went on to become a hit.
Quite obviously, Colors must have hiked the advertisement rates for the show as it gained in popularity.

But it got upset when Kapil and his team started asking for more money. But guys, you too were asking from more money from your advertisers! How does that make you any different than Kapil.

To spite its face, Colors cut its own nose and launched a rival show to the popular show rather than being magnanimous in increasing the payment to Kapil & Co.

And that left Kapil & Co. no option to terminate the show. This show made a lot of people famous and rich. Including the channel.

This is a corporate lesson in how to mismanage growth. The channel could have very easily drafted a growth clause into the agreement with the production house and agreed to increase payment based on TRP and other factors. But it must have been greedy to take all the money home. After all, they must have reasoned that it was their property.

Now, they have thrown out the baby along with the bath water. The replacement show is nowhere close to what Kapil & Co. were dishing out as a team.

Like KBC was never the same without Amitabh.

The lesson to be learned is that when drafting agreements, care should be taken to factor in all eventualities and they should always be drafted with the end in mind. Had the legal agreement factored in growth in revenue and sharing formula, it would have been a win-win situation.