On day five of Apple’s e-book price fixing trial, HarperCollins’ CEO Brian Murray couldn’t recall very much from those heady days of early 2010, when Apple was negotiating its entry into the e-book business—but his testimony did suggest that he may have been the shrewdest negotiator of the five publisher CEOs. Under questioning from U.S. attorney Lawrence Buterman, Murray—who Apple lead negotiator Eddy Cue had once described as an "idiot" for his steadily worsening counterproposals—revealed that in fact he was using Apple to leverage Amazon and Barnes & Noble into agency deals with better terms.
It was HarperCollins, in its initial meeting in December, 2009, that first proposed to Apple the possibility of using an agency model for Apple’s new e-bookstore. Although notes from Apple’s Kevin Saul say that HarperCollins suggested agency was a way to “fix Amazon’s pricing,” Murray could not recall the specifics of the meeting.


 But Murray and his team, which included Charlie Redmayne, then HarperCollins’ digital officer (now CEO of Pottermore) were not ultimately impressed with the economics of Apple’s proposals, and in the final days of the negotiations, Murray made agency proposals to both Amazon, and to Barnes & Noble for significantly more favorable terms than those offered by Apple.

“I was trying to leverage the entry of Apple to my advantage,” Murray explained, saying he would have walked away from Apple had he gotten Amazon to accept better agency terms. Ultimately, Amazon and B&N declined to negotiate agency deals. Murray was also prepared to walk away from Apple. It was a shrewd move. After all, if Murray had decided to do a deal with Apple, he was going to have to renegotiate with Amazon anyway. Why not start that process early, and see if a three-party negotiation would yield better terms?

Everything started out on great terms with Apple. In an e-mail (which Murray also did not recall) Murray told Redmayne the “meeting had gone too well,” and he “felt like he was dreaming” after the initial Apple visit. But by January 22, he told the court how negotiations had “broken down,” and he was prepared to walk away. Eventually Steve Jobs personally intervened with Murray’s boss, News Corp. executive James Murdoch. Murray conceded that had it been his choice for HarperCollins alone, he would not have done the Apple deal—however, in terms of the larger, News/Apple relationship, he embraced the Apple proposal as a good strategic move.
More