1/11/08

Striking writers strategy: Divide and conquer

A deal with Harvey Weinstein appears likely. Could the Writers Guild plan to divide and conquer be working?

Once talks broke down between Hollywood's striking writers and the studios and networks that employ them, the Writers Guild of America opted for another plan: divide and, if all goes according to plan, conquer.

The strategy is to break the impasse with the Alliance of Motion Picture and Television Producers by striking interim deals with the individual companies involved. The hope is that one or more of the major media companies--think Viacom or Disney--will be willing to break ranks with the alliance, forcing the others to follow suit. While the strategy's effectiveness is hardly guaranteed, the approach is not only logical but wise, according to labor experts.

"It's a common strategy because often a union is not powerful enough to take on an entire industry all at once," says Daniel Cornfield, a labor expert at Vanderbilt University. "For that reason, it's a very strategic way of proceeding."

On Thursday, the writers appeared to have another agreement in place. The New York Times reported that the Weinstein Company, an independent production company, will announce a deal with the guild. The company could not be reached for comment.

What makes the Hollywood scenario somewhat unique is the fragmented makeup of the alliance. Unlike the concentrated nature of many employer groups, the studio side is made up of smaller shops like the Weinstein Company and massive media conglomerates like News Corp. (nyse: NWS - news - people ), which makes the vested interests different and side deals feasible.

There aren't a lot of industries that have a structure where you can easily play one or more against each other, explains Cornfield. He likens the guild's sequential bargaining approach to that of the United Auto Workers during its 2007 strike negotiations. Rather than hammer out a single deal at once, the union negotiated company by company. In this case, General Motors (nyse: GM - news - people ) came first, followed by Ford Motor (nyse: F - news - people ) and finally Chrysler.

Ken Jacobs, chair of the Center for Labor Research and Education at the University of California at Berkeley, finds parallels in a showdown between the United Food and Commercial Workers Union and Northern California's grocery chains.

There were three major players in the market, and two came on, leaving one, in this case Safeway (nyse: SWY - news - people ), isolated. Consumers had another place to go, putting the squeeze on Safeway to agree to the same terms as the others.

Thus far, the Writers Guild has publicly announced only two interim agreements, with a handful of others reportedly in the works.

David Letterman's production company, Worldwide Pants, struck the first deal with the guild just before the new year. The agreement allowed the Late Show With David Letterman and The Late Late Show with Craig Ferguson, both of which he owns, to return to the airwaves with a full stable of writers earlier this month. (The other late-night hosts have also returned without writers.)

Tom Cruise's United Artists, the defunct studio that he and partner Paula Wagner revived after they were unceremoniously dumped by Viacom in 2006, came next. Though the terms of the early-January deal haven't been disclosed, the bottom line remains: While the rest of the studios remain dark, the MGM-owned studio can start hiring writers and get back to work.

While media reports have expressed concern over the slow pace and limited number of agreements, Cornfield isn't worried. "They're further ahead than if they try to take on the whole industry at once and not get anywhere," he says.

In the meantime, the incremental gains have delivered boosts in both morale and public opinion. "It shows that they're making progress," says Jacobs of the interim agreements. "And in this case, that's a win for the guild because it's a demonstration that what they're asking for is not unrealistic."

But like all strategies, the splintering approach isn't without flaws.

The way Rob Seber, professor of industrial and labor relations at Cornell University, sees it, it's only a good strategy if the guild can make those terms all the same. "If they start to strike individual deals where there's an exception here, an exception there," he says, "then they end up losing the advantage of a single, national collective-bargaining agreement."

Varying agreements could add some complexity and confusion to the negotiation process going forward, adds David Smith, a labor economist at Pepperdine University.

Cornfield admits he's slightly concerned that the current tactic runs the risk of cracking the united front of the Writers Guild. When you have some members back at work while others remain on the picket line, he says, that's always a reason to fear.

(forbes.com)

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