CRACKS IN AMPTP'S UNITED FRONT - IS CHERNIN THE ANSWER? (WSJ, LAT, DHD)

By Nancy Vialatte

The Los Angeles Times and the Wall Street Journal today take a look at the conflicting agendas of the major Hollywood studios. The divisions are something that has slowed down the ability to reach a quick unanimity in strike talks, as required by the rules governing the AMPTP. The two reports follow a similar posting by Nikki Finke yesterday.

The fate of talks between the AMPTP and the Writers Guild of America, which resumed yesterday, could depend on that dynamic. The diverging agendas of the companies� television and movie interests have resulted in the emergence of two camps: the moderates, which are angling for a swift resolution, and the hard-liners, which can withstand a strike longer. (WSJ)

There is definitely a hardliner-moderate schism inside the AMPTP. The hardliner CEOs fully expect that, with enough time on the picket line and little progress at the bargaining table, the WGA will splinter along the haves and have nots, with big names deciding to go fi-core and guild negotiators losing their clout. Those moguls that really do want to see the strike end sooner rather than later, believe the "human dynamic" within the negotiating room isn't working and has to change. These moderates believe that, instead of Nick Counter, one of their own should be bargaining. Their choice is Peter Chernin. (DHD)

During a recent earnings conference call News Corp. President Chernin responded to a question by saying that the strike could be �a positive for the company.�

Still, Chernin was one of a handful of CEOs involved in backchannel talks with writers early on.

"Candidly, I'm happy to follow Peter. Logically, we need one person to go make the deal for us. But the 7 biggest producers all have conflicting views and big egos and it's difficult to designate a single individual," a studio chief told Finke.

Since its founding in 1982, the AMPTP has required its 11-member board to make decisions under a �rule of unanimity,� with each member having veto power, notes the LAT.

Achieving unanimity was much easier two decades ago, during the last writers strike, when studios had much more in common. Their businesses have spread beyond the days when they were all solely film and TV operations. Now they are also involved in cable, music, the Internet, publishing, theme parks and video games. And what�s good for one company may not necessarily benefit another. (LAT)

Further, is the uncertainty of the future. No one knows for sure how much revenue will come from the various new technologies transforming Hollywood.

However, streaming is a hugely important issue for the five networks, which view the Internet as a key way to promote their shows and lure younger audiences. The networks are owned by major conglomerates such as Walt Disney Co., News Corp. and General Electric Co., parent of NBC Universal. (LAT)

At one end of the spectrum, notes the Journal, is CBS Corp., which analysts say could be the most vulnerable to the strike because its network is a bigger part of its company compared to its counterparts. Walt Disney Co. and General Electric Co.�s NBC Universal also have reason to want a quick settlement. But News Corp. and Time Warner Inc. can better afford to hold firm on the most contentious issues, say people close to the talks.

As in any labor negotiations, though, the positions of the producers are also fluid. They want to present a common face at the bargaining table, where one of the core issues is how writers should be compensated when their work is reused in digital forms. But the perception of divisions among the studios could work in their favor, creating a good cop/bad cop scenario that might be key to getting the best deal. Indeed, News Corp., among others, has at times floated between the two camps. And if the writers ever look ready to compromise, several people on the producers� side say they would pull together pretty quickly. (WSJ)

Some executives at other studios have privately expressed concern that CBS might lose its nerve in the face of a protracted strike. But CBS disputes the notion that it is most exposed. A CBS spokesman says the company is diversified in other businesses, which make up a significant part of its profits. (WSJ)

Disney also relies heavily on episodic TV shows.

NBC Universal too is in the same boat, except that its network is in fourth place and has some protection because it�s part of GE. However, Jeff Zucker noted this week that NBC�s primetime schedule represents only 10% of NBC Universal�s bottom line and that he expects NBC to have enough new programming to get through March.

Time Warner is also more insulated from the strike because of its far-flung assets in cable operations and movies. And its broadcast network is the relatively small CW. Time Warner owns a heavyweight movie studio, but the studios already have their movies for 2008 in the bag. As a result, the movie business isn�t expected to feel real pain unless the strike drags well into next year. That also applies to such companies as Viacom Inc., whose main vulnerability is its movie studio, Paramount Pictures. (WSJ)

Harry Katz, dean of Cornell University�s School of Industrial and Labor Relations, told the Journal, that it�s unusual that the management side of a labor negotiation is made up of so many parties of �different sizes, financial resources and interests.� He added: �Which coalition breaks first will be the critical element.�

Yesterday, Nikki Finke wrote on DeadlineHollywoodDaily.com, �For weeks now, I've talked to several moguls about why they don't deal individually with the WGA and blow off the AMPTP. After all, rather than collude, these major studios and networks are supposed to compete with one another.�

CRACKS IN AMPTP'S UNITED FRONT - IS CHERNIN THE ANSWER? (WSJ, LAT, DHD)

By Nancy Vialatte

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