A Tale of Two Strikes: The Business Perspective

Here are some excerpts from two interesting analyses from two NYT business/media columnists, comparing the current entertainment industry battles on the two coasts.

First David Carr gives the stagehands the edge in clout, thanks to the (relative) liveness of the medium.

On the surface, the writers would seem to have all the cards, and the stagehands few....But the stagehands, who began striking almost a week after the writers, are most likely the ones who will be heading back to work first. The writers still confront the stalemate over distribution of revenues from digital content. So how will 400 or so (mostly) beefy guys in Manhattan accomplish what currently seems beyond the reach of the 12,000 members of the writers’ guild?

Begin with the fact that the stagehands have actual leverage — the ability to shut down moneymaking entertainment that occurs at a specific time and place. Writers are increasingly part of a digital economy, where entertainment comes from every direction, and shutting off the spigot is next to impossible....

[...]

Although back-channel efforts by talent agents, politicians and media executives may push the writers’ talks back to the table, the pressure to settle is more intense on Broadway, where millions of dollars immediately started going by the wayside each night the lights were out.

“With Broadway and the stagehands, the value chain begins and ends pretty much with the theaters themselves,” said Ronald L. Seeber, a professor of industrial relations at Cornell. “It’s much more akin to what the auto workers have been fighting about — the number of warm bodies, manning requirements and job duties.”

“The writers want to participate in profits that come from the creative process,” he added. “It has a much longer tail. Right now, I am using a DVD of ‘Twelve Angry Men’ in my classes, a film that is 50 years old and demonstrates the power and longevity of what was created.”

[...]

The stagehands may have what writers want — a working settlement — but the outlook for unions remains grim, whether in pixels or plays.

“Both unions are operating from a defensive position, whether they will admit it or not,” said Peter J. Rachleff, a professor of history at Macalester College. “We are living in a political economy that assumes workers are going to go backwards in almost every instance.”

Oh and just to further depress the writers out there...

The News Corporation [aka Rupert Murdoch] has a significant hedge because it has a huge hit in “American Idol,” a lucrative franchise that could be stretched to cover a multitude of shortfalls. Peter Chernin, the president of the News Corporation, said in a conference call about earnings last week that the walkout is “probably a positive” for the company. “We save more money in term deals, and story costs, and probably the lack of making pilots than we lose in potential advertising.”

And here's Steven Greenhouse confirming my hunch last week that this all marks a new chapter in cracking down on Labor's cost to the profit margin.

Do the walkouts portend a resurgence of labor, even a new union militancy? The answer, for various reasons, appears to be no.

Harley Shaiken, a labor relations expert at the University of California, Berkeley, said the disputes showed that unions, although weaker than before and going on strike far less frequently than before, will not shrink from some battles.

“To paraphrase Mark Twain, all this shows that reports of the death of strikes are greatly exaggerated,” he said. But many labor experts said the strikes resulted not from a newfound aggressiveness, but from a defensive effort by unions to hold onto what they have.

When 350 stagehands went on strike last Saturday, closing down 27 Broadway shows, it was after the producers announced a policy that would reduce the number of stagehands per production as well as the overtime that stagehands would receive. The theater producers complained that the old union contract had unreasonably increased their costs on many shows by calling for more workers than necessary.

In Detroit, G.M. and Chrysler workers went on strike after the automakers, with higher labor costs than their Japanese competitors, demanded a less costly health plan for retirees and a lower wage scale for new hires. Some auto workers said union leaders had orchestrated short strikes to try to convince the rank and file that they had fought their hardest; the union leaders described the strikes as effective bargaining tactics.

“These aren’t strikes to explore new territory, but rather to protect past gains — to prevent deterioration in working conditions and job security,” said Gary Chaison, a professor of industrial relations at Clark University in Worcester, Mass. “All this shows that management is getting stronger and much more confrontational.”

[...]

“In all these situations, management basically said you do what we want you to do or you have to stage a strike, and the union viewed a strike as a good piece of strategic leverage,” said Richard W. Hurd, a professor of labor relations at Cornell University.

He saw an important parallel between the disputes in Hollywood and Detroit. “The unions there are struggling to keep up with the changing structure of the industry,” Mr. Hurd said.

So, note that management in all these cases sees a "changing industry" (and indeed the changes are many) and demands labor play along. But the purpose of unions is to make sure labor has a say in changing practices. You realize in this context how good a position the stagehands are still in due to their true indispensability. It's the "talent" that now has to worry more in the entertainment biz:

Mr. Shaiken suggested that the stagehands had more leverage than the writers. “The stagehands have darkened the theaters. Period. With the writers, it’s a long test of wills,” he said. “The TV networks can always show reruns, but the strike will exact a long-term toll in a volatile industry.”

Greenhouse also adds this note of optimism for the theatre:

“Broadway producers can’t simply move a play to a theater in Mexico and have a New York audience watch it there."

Oh yeah? Watch them.

I can see it now: 4 Days & 3 Nights of snorkling, sunbathing, and song! That's right--Mama Mia in Mexico! We'll fly you down, feed you, pamper you, and entertain you with B'way-Quality* (*road company) stars assisted by local technicians for an Abba-rific Fiesta of Mex-ical Theatre you'll never forget!