To Avoid an Impasse, Keep Talking

By on / Business Negotiations, Daily

Adapted from “How the Writers Got Back to Work,” first published in the Negotiation newsletter.

What happens when people think they’ve invested too much in a dispute to back down from their entrenched positions? This question rose to the fore as the Writers Guild of America (WGA) West and East’s strike against the Alliance of Motion Picture and Television Producers (AMPTP) dragged from weeks into months.

Following three months of bitter negotiations with the AMPTP over a new contract, the writers closed laptops on November 5, 2007. In addition to seeking an increase in their residual pay for movies and TV shows released on DVD, writers insisted on a contractual guarantee for residuals on shows and films aired on the Internet and other “new media” outlets. The AMPTP argued that more time was needed to find out whether new-media revenues would be significant before reaching a profit-sharing agreement.

As the two sides took turns angrily rejecting each other’s proposals, television network ratings slumped, and AMPTP member companies laid off support staff. The Los Angeles County Economic Development Corporation estimated that the strike (which remained unresolved as of this writing) was costing the regional economy $220 million per month.

On February 12, 2008, the writers and producers announced they had reached a new three-year deal that would end the 100-day strike. Both sides expressed satisfaction with the new contract, which granted the writers their key demand: a percentage of revenues generated by digital formats such as the Internet. Here are three factors that made a difference in the final days of resolution:

1. A looming deadline. A deadline, whether real or self-imposed, can offer disputing parties a real incentive to break through impasse. Both sides in the WGA strike were motivated to come to agreement before the end of the spring television season and before the February 24 Academy Awards show, which the writers were expected to picket.

2. A useful precedent. In mid-January, as the WGA strike dragged on, the AMPTP reached a tentative agreement with the Directors Guild of America for a new three-year contract. The directors’ new gains in DVD and Internet residuals offered a template for the WGA and spurred the writers to negotiate even better terms for themselves.

3. Improved communication. Lack of communication and a public war of words deepened tensions and distrust between the WGA and the producers. Negotiations finally got serious after company executives reached out to the WGA. Under cover of a media blackout, the two sides met in small groups and got to know each other. The talks “started off cautious but gradually warmed up and became very productive,” WGA lawyer Alan Wertheimer told Variety.

The most important take-away from the costly strike? It might have been avoided if parties had gathered regularly between contracts to discuss their concerns and plan for the future. “The lesson is, we shouldn’t meet every three years,” CBS chief executive Leslie Moonves told the New York Times.

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