Why You Should Never Split The Difference

How a Hollywood agent learned to turn 'unrealistic' demands into a 7-figure win (and the psychology that proves your industry experts might be wrong).

I witnessed a team of high-profile Hollywood agents nearly negotiate themselves out of over $400,000 for their client, a promising film director.

Six words would have spelled their doom—had we not intervened.

"We can't ask for that much."

My response?

"You should never be so sure of your worth that you wouldn't accept more."

Have you ever been afraid to counter or anchor high—or even ask for a cost-of-living adjustment? Do you concentrate on industry trends, compensation surveys, and annual benchmarks to assess your worth in the market?

That approach creates a major blindspot for you.

Today's insider client case study will fix that—and it will forever reframe your mindset around how to think about negotiation.

If you want more real world case studies — let me know in the comments and I’ll prioritize more client experiences.

Here's What Happened

A promising film director had a track record of $250,000 movie deals. They mentally anchored themselves around $250,000 as their value in the market.

$250,000 was their baseline, their expectation, their comfort zone.

The talent agency representing them wanted to push the director's fee to $500,000 because industry precedent supported this number. Recent comparable deals backed it up.

Every agent agreed $500,000 was "realistic" and they and their director client would be ecstatic.

Plus, they'd earn an attractive success fee for the agency that nobody would question. The deal would be done quickly. Clean and simple.

Afterall, who could be upset with an easy 100% compensation increase?

“Coincidentally” - the buyer (a streaming platform you've used) proposed an initial offer of $500,000.

It would appear that both parties landed on the exact industry expectations instead of understanding the true value being created by their deal.

Sound familiar?

…like companies and recruiters and candidates all anchoring around the same publicly available compensation data versus the complexity of driving a value based negotiation…

Now let's introduce another layer of complexity to this client case study. Bear with me.

Legal.

The director's legal team, with a respected reputation of being the most aggressive in Hollywood, suggested countering the $500,000 proposal with an ask for $1.3 million.

The call went silent.

The agency pushed back.

"That's too aggressive."

"We'll blow up the deal."

"They'll think we're crazy."

The fear was palpable, the consensus clear—stick to what works, protect the relationship, don't get greedy.

I worked with one of the agents to convince the other agents to yield to the lawyer's aggressive counter anchor.

But, I added, "How do you know the lawyer's counter is aggressive? Is it just perceived as being aggressive? The value of this production is much more than $1.3M. We should instead aim for value based conversation. Watch what happens when the buyer counters."

Fast forward a few days—here's what happened when the team presented that "aggressive" counter:

The buyer came back at $900,000 within 12 hours.

Not with an angry, "How dare you?!"

Not $550,000.

Not $650,000.

Nine hundred thousand dollars.

$400,000 more than their initial offer and $400,000 less than the counter. Exactly splitting the difference between $500,000 and $1.3 million. Perfect compromise.

Curious—isn't it?

This wasn't a negotiation.

This was a real-time psychology experiment, and everyone failed the test.

The "realistic" $500,000 ceiling became a $900,000 floor the moment someone was willing to challenge the industry's comfortable assumptions.

Never split the difference. Because when you do, you're not being fair—you're being managed.

The most expensive mindset you could have is: "that's too much to ask for."

Because the moment you think that, you've just negotiated against yourself and handed your counterpart exactly what they need to minimize your outcome.

Your approval.

Every industry has its version of this story.

Every negotiation has its moment when "reasonable" expectations collide with uncomfortable possibilities.

The question isn't whether you'll face this choice—it's whether you'll have the psychological tools to recognize it when it happens.

When Industry Experts Become Industry Prisoners

Let me introduce you deeper to the players in this $400,000 gamble, because their roles exist in every high-stakes negotiation you'll encounter.

The Agent (My Client)

One of five agents on the team, and not the most senior. They found themselves caught between what they could see was possible and what their senior colleagues believed was realistic. They knew their director client deserved more, but they were outnumbered by respected agents who carried the weight of industry "wisdom."

The other agents had seen deals blow up over "unrealistic" demands. They'd watched relationships deteriorate when someone pushed too hard. Their collective expertise had become limitation.

But my client was different.

They were willing to learn how to influence up—how to give themselves— and their senior colleagues the courage to listen to the lawyers instead of dismissing them as "too aggressive."

The Talent Agency

Had become prisoners of their own recent successes. They'd closed similar deals at $450,000, $525,000, $600,000. They had data, precedent, industry knowledge.

What they didn't have was the psychological distance to see that their "realistic" ceiling had become the streaming platform's negotiating floor.

Their track record of "success" had blinded them to the possibility of breakthrough outcomes.

The Legal Team

Carried the label "aggressive" like a scarlet letter. Other agents and lawyers whispered about their tactics. Insiders rolled their eyes at their "unreasonable" demands.

But here's what nobody wanted to acknowledge: their reputation for aggression had become their strategic advantage (and possible blindspot).

When they said $1.3 million, the buyer responded with nearly double what the "experts" agreed was possible.

The Streaming Platform

Played their own game with their own constraints, or so everyone assumed.

The platform had budgets, precedents, approved ranges.

But their $900,000 response revealed something critical—their true constraint wasn't budget. They were happy to pay market rates plus a premium, but only when forced to do so by someone willing to test their perceived ceiling.

This is how the PRECEDENT PRISON works in every industry.

Historical data becomes a future limitation. Industry standards become self-imposed ceilings. "That's how we've always done it" becomes "that's how we'll always do it" – until someone refuses to accept the premise.

The psychology of comfort zones in high-stakes negotiations is seductive.

When you've built a career on consistent, defendable outcomes, why risk it all on an "aggressive" strategy that might backfire?

Here's the trap: "Aggressive" is often just code for "unfamiliar."

The legal team wasn't being aggressive–they were being strategic. They understood something the industry experts had forgotten—the first person to mention a number sets the anchor, and anchors determine outcomes more than expertise, precedent, or relationship management combined.

The streaming platform's $900,000 response wasn't generous. It was predictable. Not because they wanted to pay more, but because the $1.3 million anchor forced them to reveal a greater part of their range.

The "perfect split" at $900,000 wasn't coincidence—it was psychology in action.

But did the lawyers really propose the right counter?

Would a counter of $1,500,000 result in another perfect compromise at $1,000,000?

We’ll never know.

The Uncomfortable Questions Your Industry Won't Answer

The real lessons emerge when you start asking the uncomfortable questions that industry experts don't often address.

Are the agents the ones to follow if they're scared?

The agency team's immediate resistance to the $1.3 million counter revealed something profound about their expertise in high-stakes negotiations.

These weren't junior representatives—they were incredibly respected senior agents at a top-tier firm with decades of combined experience and billions in successful deals.

Agents are often glorified and worshipped in society. Jerry Maguire anyone?

So why were they scared?

Risk aversion in representation creates a fundamental conflict of interest.

Agents, advisors, and consultants build their reputations on consistent, defendable outcomes. A successful $500,000 deal enhances their credibility.

A failed $1.3 million negotiation damages their reputation, even if the attempt was strategically sound.

This is when "expertise" becomes limitation. Their success rate becomes more important than their client's optimal outcome.

Anyone ever meet a realtor or work in car sales—or hire a mediocre career coach?

Is the attorneys' 'aggressive' reputation accurate or convenient?

Labels in negotiation serve specific psychological functions. When someone gets labeled aggressive in business, ask yourself: aggressive compared to what? Aggressive according to whom? And most importantly: who benefits from that label?

Question everything.

The legal team's reputation for being "hyper-aggressive" had become strategically valuable precisely because it allowed them to test ceilings that others were afraid to approach. They weren't aggressive—they were effective.

Where is the actual ceiling, and how do you know?

The streaming platform's $900,000 response revealed that their true range was significantly higher than anyone except the legal team had imagined.

But even $900,000 might not have been their actual ceiling—it might have been their psychologically engineered ending point.

The most revealing aspect? They never said no. They never threatened to walk away. They never expressed shock at the $1.3 million counter.

They simply responded with a number designed to end negotiations at a point that felt like a conveniently calculated "fair."

Who benefited from everyone's 'reasonable' expectations?

Every "realistic" assessment, every industry precedent, every piece of conventional wisdom had calibrated expectations to serve the streaming platform's interests, not the director's.

Similarly, the job market is calibrated to serve employers—not candidates.

Take note.

Conservative positioning serves the buyer in nearly every negotiation, but it's disguised as professional expertise, relationship management, and industry knowledge.

When representatives are more afraid of asking for too much than they are of leaving money on the table, they're optimizing for their own comfort rather than their client's outcome.

Your Real-Time Negotiation Toolkit

When you're sitting across from someone who just made you an offer that feels "reasonable," this is your moment.

The CEILING Reminder

Remember CEILING when caught in this process and refer back to this article when needed:

Challenge market rate assumptions - Market rates are historical data, not future limitations. Every industry has "market rates" that actually serve buyers' interests by limiting sellers' expectations.

Explore initial offer psychology - When someone opens at your target number, you've anchored too low. Initial offers reveal more about their perception of your expectations than their actual constraints. Focus on aligning value generated between parties, not generic market expectations.

Investigate conservative positioning - Every piece of conventional wisdom serves someone's interests. Ask: who benefits when I accept industry precedent?

Leverage pattern recognition - Look at what people do, not what they say. Behavioral patterns matter more than industry precedent.

Ignore limiting labels - "Aggressive" is a label designed to discourage boundary testing. Effectiveness often gets labeled as aggression by people invested in maintaining the status quo.

Navigate past comfortable compromises - When both parties feel good about a compromise, someone's being manipulated. True optimization often feels uncomfortable.

Generate data points - You can't find ceilings without testing them. Every "unrealistic" request generates information about actual constraints versus assumed limitations.

The Questions That Will Transform Your Next Deal

When you're in the middle of negotiations, ask yourself these five questions.

They'll reveal whether you're optimizing for your outcome or someone else's comfort:

1. Who/what in your industry is considered "too aggressive" — why? – and what if it’s just strategic positioning?

2. What "industry standards" are you accepting without question?

3. How much money are you leaving on the table by seeking consensus instead of ceiling?

4. Are you falling into the "split the difference" trap?

5. What would change if you tested the psychology of your next negotiation?

Use these questions as your bullshit detector.

When someone tells you your request is "unrealistic," ask: unrealistic compared to whose comfort zone? When they say "that's not how we do things," ask: whose interests does that serve?

The moment you start questioning the premise, you start clawing at the ceiling.

This pattern shows up everywhere, not just in Hollywood negotiations…

(Another) Real-World Example—The Near $187,500 Mistake

I had another client negotiating a C-level role with a $700,000 on-target earnings package. During final discussions, the CEO and my client verbally agreed to a 6-month severance protection based on full compensation (base salary plus on-target-earnings/bonuses).

When the employment contract arrived, my client's heart sank.

The severance clause read "6 months base salary" not "6 months on-target-earnings" — It offered $187,500 in protection instead of $350,000.

My client, excited about the role, didn't want to "rock the boat" and damage their new relationship. He called me wanting to voluntarily split the difference—propose $268,750—the perfect middle between $187,500 and $350,000 to seem "reasonable."

Instead, I told him to clarify what happened rather than jump to compromise.

"There seems to be a discrepancy between our verbal agreement and the contract language. We discussed 6 months full compensation, but this shows base salary only. Can you help me understand what I got wrong?"

The CEO's response?

"That must have been a mistake. No problem."

Legal corrected the contract within 24 hours.

Just over a year later, my client was unfortunately terminated without cause.

They're now have more leverage for their next role with $350k in severance protection instead of half that amount—all because they had the courage to refuse splitting the difference on what ended up as a simple correction.

Embracing the uncomfortable takes courage. I applaud those willing to bet on themselves. It’s no small task.

The lesson: Before you compromise, ask yourself: are you avoiding conflict for no reason? Is it possible you just need to clarify but don't know how to ask?

Your Three Immediate Commitments

First: Identify one "precedent" you're accepting without questioning. Research who actually benefits from that precedent.

Second: Research who benefits from conservative positioning in your industry. Recognize when professional expertise has become anchored to maintaining comfortable ranges.

Third: Test one assumption about "reasonable" expectations in your next negotiation. Try anchoring outside industry comfort zones. Generate data about actual constraints.

If you don’t ask, the answer is always no.

A Word of Caution

Don't be an idiot about this.

These techniques work when you have leverage, credibility, or unique value to offer. Use them when you bring something they actually need, have alternative options, or are dealing with profit-driven entities.

If you're desperate for the deal, easily replaceable, or negotiating with genuinely constrained budgets, assertive anchoring can backfire spectacularly. Read the room. Test boundaries when you have something they actually need, not when you need something they have.

Conclusion

Today’s lesson isn't really about Hollywood.

It's about the compound cost of accepting limitations that others have imposed on your possibilities. It's about recognizing when "expert" advice serves the wrong party's interests.

Every outcome sets the anchor for future expectations.

Every "reasonable" agreement calibrates the market's perception of your standards.

Every time you split the difference, you train your counterparts to anchor lower in future dealings.

By the way—that director negotiation closed at $1,100,000 + additional non-monetary concessions from the buyer after a few intentional counters.

Never split the difference.

Because when you do, you're not being fair—you're being managed.

And remember—a rising tide raises all ships.

Help others fight the good fight too.

Need help applying this? Upgrade to paid for monthly live sessions with Jacob.

Stay fearless, friends.