Hollywood produces drama. But the geographic Hollywood may become the stage for a showdown representing the end to an old dynamic that balanced the interests of workers against the power of huge corporations.
From an historical standpoint, it's going to be a riveting drama. But from the standpoint of a long-time (56 years) American TV viewer who loves scripted TV, it's depressing. It is the logical real world outcome of shifts in organizational theory, the collapse of the international labor movement, and the simultaneous rise of the international corporate economy in the last half of the 20th Century. Within that larger framework, a scenario has evolved with its tensions and real characters.
The protagonist is Screen Actors Guild (SAG) President Alan Rosenberg. He's had years of significant roles in TV and movies. He's been a political militant all his life. During the 'radical' 60s, Rosenberg became a member of the Black Panthers and was an active protestor of the Vietnam War. He's from a show business family and is married to actress Marg Helgenberger.
Rosenberg may be an anachronism within the current American labor climate in that he strongly believes labor should get a larger piece of the pie than it has over the last three decades and it is worth a major sacrifice to get it.
Flashback - Rosenberg describes to the crowd the crux of the drama’s conflict from his perspective: “Fair play doesn't pertain in bargaining. What matters there is leverage. Here (pointing to the crowd) is the leverage. Our leverage is that we're the product. We took a bad deal for cable 25 years ago. We took a horrible deal for VHS 20 years ago. We won't be fooled again.”
While most of SAG’s 120,000 members are probably sympathetic to the idea they've been screwed for 30 years, most also are typical of Americans - up to their ears in debt and not willing to sacrifice their cars and homes for principles. My guess is that Rosenberg and Helgenberger were not one of those couples whose lifestyle is in serious financial jeopardy because of last year’s writers strike. The dramatic dilemma for Rosenberg is that he has no real leverage unless he can get a “strike vote” from 75% of the SAG membership.
Our drama has two principal antagonists. The first is Jeff Zucker. In 2005 Zucker was promoted to Chief Executive Officer of NBC Universal Television Group behind Bob Wright, vice chairman of General Electric and chairman & CEO of NBC Universal. On February 6, 2007, to the position of president & CEO of NBC Universal (NBCU), replacing Wright.
Zucker is the perfect historical antagonist to Rosenberg. He is the son of a cardiologist, was captain of his high school tennis team, a Harvard graduate who majored in history and was President of the Harvard Crimson, who was hired by NBC in 1988 to research material for its coverage of the 1988 Seoul Olympics. From there he became the Executive Producer of the Today Show at age 26 and has continued to rise in the NBCU organization.
In contrast to the relatively small SAG organization, NBCU is a subsidiary of General Electric Company (GE), the world’s third largest multinational conglomerate considered by many to be the most successful conglomerate. Despite the recent economic collapse, on October 10, 2008 Zucker’s boss, GE Chairman and CEO Jeff Immelt, reported that third quarter revenues from continuing operations were $47.2 billion, up 11%. “Our infrastructure and media businesses continued to see signs of strength,” Immelt explained. “NBC Universal grew segment profit 10%, its eighth straight quarter of growth.”
GE’s financial subsidiary, GE Capital, did report problems related to the general economy. But there is no real need for the American taxpayer to worry about this subsidiary of the world’s third largest conglomerate. On November 12, 2008, the Federal Deposit Insurance Corporation approved GE Capital as an eligible entity under the FDIC's Temporary Liquidity Guarantee Program, under which the FDIC guarantees GE Capital's senior unsecured debt.
Yes, Zucker, as the outwardly congenial “company man” fronting for an impersonal international conglomerate, is the perfect antagonist to Rosenberg. Early this year, Zucker addressed the perennial question about whether General Electric was thinking about selling NBC. "As things have improved with NBC Universal and NBC prime time, those questions have subsided. It's all about performance. If we perform, the question goes away. If we don't perform, they should sell us."
But there is a second antagonist. Rupert Murdoch is described as an Australian-American global media mogul. He is the major shareholder, chairman and managing director of News Corporation (News Corp) which owns all the various Fox media brands. Murdoch's father was a powerful Australian newspaper proprietor and his mother the daughter of a wealthy Irish family. After attending Oxford, Murdoch became managing director of News Limited in 1953. From those not very humble beginnings, Murdoch built News Corp, a holding company which is the world's largest media conglomerate. According to the 2008 Forbes 400, Murdoch is the 109th-richest person in the world, with a net worth of $8.3 billion.
If one might doubt that Rosenberg family struggled much financially during the writers strike, one might be tempted to think Murdoch didn’t know the strike was going on. One would be wrong because, unlike Zucker, for Murdoch everything that affects his business empire is very personal. And very much like Rosenberg, Murdoch understands that everything he does is political.
The nature of the battle between the media congloms versus organized labor during the past 18 months is clear. Much like the financial institutions that recently collapsed, the congloms don’t care about the public, the workers, or the shareholders. The attitudes of management reflect an ego oriented self-assured manipulative aggression. And they are good at it as they control significant elements of the flow of information around the world.
The Alliance of Motion Picture & Television Producers (AMPTP) representing Zucker and Murdoch clearly had a plan to crush the creative guilds built around all the flaws the membership of the guilds themselves created.
Unlike the AMPTP which is made up of the dominating conglomerates plus others, the guilds are made up of squabbling creative egos. The struggles within the WGA and SAG make them look like the Italian Parliament, unable to suppress “healthy” dissent long enough to create a healthy being. To get the two guilds to work in unison against AMPTP would be, at best, a daydream for a serious labor organizer.
So, AMPTP was given many gifts by the workers. To begin with, the labor contracts didn’t all expire at the same time. So the WGA contract expired October 31, 2007. Talks began on July 13, 2007 with AMPTP making the following ultimatum as reported by Variety :
"As for the proposals, the AMPTP beat the guild by several hours in disclosing its official demands. The companies told WGA members they have two choices:
"1. Maintain the status quo via a three-year contract that provides for a study centered on revamping compensation in order to figure out how to pay writers from revenues from the plethora of new-media platforms. Agreeing to the study would keep the current residuals system in place with increases in salary minimums to be negotiated.
"2. If there's no study on revamping compensation, the companies will play hardball and demand a four-year deal that will institute a recoupment-based residuals system -- meaning that writers receive residuals only after companies have made back their basic costs of development, production and marketing."
In other words, the proposal from the congloms was “you agree to give us the content you create over the next three years and we will study how to compensate you for our use of it.” And at no point in time prior to the beginning of the strike November 3, 2007 did the congloms improve that offer.
As I wrote in December, it was obvious that AMPTP was bargaining in bad faith in order to force the WGA to strike which created a de facto lockout of other workers including SAG members.
Among those locked out were directors who, though directors are clearly middle management, belong to a guild of their own - the Directors Guild of America (DGA). The AMPTP intended to use locking out its middle management personnel in the DGA to manipulate the course of events. Naturally, the AMPTP was very successful. By the middle of December, the DGA announced it was going to negotiate with AMPTP on its contract which wasn’t due to expire until June 2008.
And indeed, after “highly productive” informal talks, the DGA and AMPTP met January 12, 2008, and wrapped up a deal six days later. It didn’t take much for middle-management and management to agree on a deal.
This ramped up the pressure on the WGA. And there already was pressure. WGA members were complaining. Craft and Teamsters union members were hostile. The public was hostile. Even within SAG which was facing its own contract expiration in June, actors were divided. So much for a united front from labor. The congloms had won.
Or had they?
Sure, a WGA contract “modeled” on the DGA contract came soon after January. But Alan Rosenberg refused to accept this model, despite it being embraced by SAG’s competitor AFTRA. He just waited right up through, and well beyond, the expiration of the existing contract in June, explaining it was a bad contract for creative workers.
Even after his own membership elected new Board members to get things moving, he held his ground. And the new Board members, not wishing to be seen as totally incompetent, gave him more time by asking for federal mediation.
Just one day before the first mediated meeting between AMPTP and SAG, WGA members finally figured out they were screwed in the new contract. From Variety:
"In a move echoing the bitter disputes surrounding the 100-day WGA strike, the Writers Guild of America West has accused the conglomerates of failing to comply with the guild's 8-month-old contract.
"The move elicited a sharp denial by the Alliance of Motion Picture & Television Producers, which asserted that the WGA has misinterpreted the terms of the deal that ended the strike by wrongly asserting that it covers projects prior to start of the agreement.
"The WGA announced Wednesday that it has filed for arbitration over alleged nonpayment of new-media residuals for programs sold as electronic downloads, also known as electronic sell-through (EST). WGA West board member John Bowman, who headed the guild's negotiating committee, said the contract with the companies on electronic sell-through covers feature films produced after July 1, 1971, and TV programs produced after 1977.
"'The companies have reneged on this agreement and are taking the position that only programs produced after Feb. 13, 2008, are covered by the new provision,' he added. 'This may be their deal with the DGA, but that was never our agreement. Every proposal we made during negotiations made clear our position that library product was covered, and the AMPTP never objected to that position. The guild will not allow this to stand.'
"The AMPTP shot back that the WGA is mistaken about how the new-media residuals apply."
And so the mediated talks between an unbending AMPTP and SAG failed when Rosenberg presented this news of bad faith bargaining by AMPTP. And Rosenberg can now ask SAG members to consider authorizing a strike.
Zucker, Murdoch, and their fellow conglomerate CEO’s are willing to bet Rosenberg can’t persuade 75% of the SAG voting membership to approve a strike. If they are right, they will have effectively broken organized labor in the media industry. If they are wrong, the next question will be: "Will the congloms risk a strike?"
Maybe Rosenberg can pull off a “Norma Rae” win saving what little bit of influence labor has in this country. It will be a true “Hollywood drama” with consequences for the rest of us. Sure, the potential consequences include disrupting our TV. But the consequences potentially include American labor giving up on more than a century of workers seeking a fair and equitable share of the American dream.
I rooted for a fictional "Norma Rae" and now I'm rooting in real life for Alan Rosenberg. And I'll donate to a strike fund for all the affected media workers if it comes to that.
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