When last we left Ari and Terrence negotiating Ari's compensation Terrence had ceremoniously offered Ari "NOTHING!!!"

But we're not talking only money here.  We're talking power and agency in the psychological sense, i.e., agency as the capacity to control one's own future.  Before the "nothing!!!" offer, Ari had told his wife he was still "afraid" of Terrence even as she attempted to prop him up by reminding him that he was Terrence's partner now.  Although Ari wants control of the agency,  his strength falters when Terrence comes back from a seven-year sabbatical. 

Ari's discomfort in the scene below is palpable.  Terrence asserts his authority ("I hope you're not planning to expense the Bat Mitzvah to the agency"); implies that Terrence's daughter had better instincts for talent at eight years old than Ari has now; and, previews his plan to take over Ari's five-year relationship with the talent of the hour -- Vincent Chase. 

Ari is dealing from a position of psychological if not actual weakness.  Having Terrence back on the scene is a little like going back home for the holidays after a few years at college.  You feel independent but it takes only a few minutes with your parents to revert to your powerless teenage self.  The final blow to Ari's self-esteem below is delivered in the form of a "gift."  $50,000 for Ari's daughter's Bat Mitzvah.  Ari is fifteen years old again.

Sensing Ari's weakness, Terrence moves to consolidate his power by taking over a staff meeting from which he excludes Ari.  But Terrence has over-played his hand.  Using Terrence's violation of the agency's folkways ("you embarrassed me in front of my troops") Ari pries an apology out of him and wins his first battle over who can summon the other's attendence by fiat.   

When Ari returns to the negotiations, he has re-set the bargaining table in a way Lax and Sebenius in 3-D Negotiation would applaud.  The subject of the negotiation is no longer Ari's share of the profits, but the value of the company itself and Ari's share in it.  Note how Ari takes credit for the lion's share of the company's present value and emphasizes the company's vulnerability if Ari leaves.

The deal is sealed but the check unwritten and Terrence has no intention of fulfilling his promise when he learns that Ari intends to open his own agency, (tortiously) raiding Terrence's shop of its agents and clients. In a remarkable power play, Terrence brings together the "five families" Hollywood, to threaten Ari with ruin if he so much as offers CAA's mail room boy a paid position. Quick on his feet, Ari accuses Terrence of anti-Semitism (making Terrence the member of an "out group") and then promises not to touch any agency's clients other than Terrence's.

With no money to open his new agency, Terrence's agents are not inclined to follow Ari until an unlikely partner offers to fund his venture, below.

As Lax and Sebenius instruct:

3-D Negotiation involves not one, but three dimensions, all of which are in play more or less concurrently throughout an[y] effective negotiation[:]  1. Tactics  2. Deal design 3. Setup.

Deal designs, say the authors, create lasting value.

Smart people working at the drawing board can . . . discover hidden sources of economic and noneconomic value, then craft agreements -- design deals -- that unlock that value of the parties involved.

In the Entourage negotiation, Ari unlocks his own value when he finds the courage to leave the safety of Terrence's agency and open his own.  By episode's end, Ari has changed the players, the subject matter of the negotiation and the balance of power in town.  This is 3-D negotiation at its finest (even though it also rolls out at its most shameless).

All of that said, don't miss the opportunity to appreciate Ari's "at the table tactics" in negotiating the sale of his interest to Terrence.  He enters the room confidently, refuses to permit Terrence to use his old power plays ("save a tree; say it out loud"); re-anchors Terrence's $4 million open with "my counter is $#@$ you"; explains his own value; diminishes any claim Terrence might have to the present value of the agency; signals his firm willingness to walk away; and, demonstrates his commitment to stay away in the absence of a realistic offer ("I have a rich wife who loves to spoil me").  The power shifts and the deal is done in two minutes flat.

Yes, it's Hollywood.  But all good fiction, which Entourage certainly is, rests on hard facts, all of which are brought vividly to life here.