When A Strike Threat Works – SpongeBob v. Time Warner

If done right, even a cartoon character can use a strike threat effectively. 
Unable to get Time Warner to agree to higher rates for its content, Viacom threatened to pull some of its most popular shows from distribution over Time Warner’s cable system. 
There was a public outcry over the potential loss of popular cartoons like SpongeBob Square Pants and Time Warner has reportedly caved in to Viacom’s demands for higher rates.
The dispute demonstrates the critical importance of widespread public support for demands in a media industry contract dispute as well as the continuing leverage that content providers can have in the new media environment if they know how to deploy the resources needed to secure a deal.
The LA Times reports that Viacom unleashed a PR attack and TimeWarner “was inundated with calls, and executives from both companies put their holiday plans on hold to return to the negotiations.” 
No doubt, Viacom planned their approach to these negotiations carefully.
Unlike Viacom, there was little evidence of careful planning at SAG in the run up to the current TV/Theatrical contract talks. Shoot from the hip, and usually in the direction of fellow unions like AFTRA, seemed the dominant approach.  
And no evidence that the staff or leadership understood the importance of public perception. Instead, it has been the rank and file opposition to the strike vote that pointed to the risks of a backlash against the actors in the wake of the 100 day walkout by the WGA a year ago.
As Vallywood readers by now realize, the New Year brings us the news that the Screen Actors Guild Membership First leaders have delayed their proposed controversial Strike Authorization Vote, or SAV.  The SAV would require 75% approval and that goal looked increasingly unlikely.
The decision to send out the SAV was put in the hands of the Membership First-controlled Negotiating Committee by the SAG National Board in exchange for a commitment to attempt mediation of the contract dispute with the Producers. 
But the Committee then called for the SAV after only two days spent in mediation with a Federal mediator. That seemed abrupt to many outside observers in light of the complexity of the issues at stake. 
One of the oddest apparent developments in the mediation was a report that SAG’s Membership First representatives actually agreed to the new media formula they have so vociferously opposed in return for their demand of a small increase in the cash flow into the SAG Pension and Health plan from DVD revenues. 
On the one hand this was odd because Membership First has said that agreeing to the new media “template” would violate inviolable “core principles” of the Guild and thus justified a strike. And, on the other hand, the Guild had allegedly already signaled that it would drop DVD’s from their demands altogether in the face of Producer intransigence. Thus it appeared to some that SAG did not approach the mediation in good faith.
(Of course even stranger to Membership First rank and file members must be the disappearance from SAG’s demands of an attack on the dramatically lopsided DVD/Home Video residual model used by the studios: that’s the real cash cow – some $24 billion in annual revenue relative to the almost non-existent “new media” revenue stream.)
In any case, when thousands of actors emerged to oppose the SAV, led by A-listers like Tom Hanks and George Clooney, SAG’s NED Doug Allen and President Alan Rosenberg announced its delay. Since the Negotiating Committee was in charge of the timing of the SAV, presumably they agreed to the delay.
Of course this is a “delay” in name only. Barring an absurdly stupid move by the Producers – such as imposing new terms and conditions – SAG has all but given up the possibility of using a strike weapon. 
Of course there are other options and a National Board meeting has been called for January 12-13 to confront the crisis. With the “strategy” of Doug Allen and Alan Rosenberg now exhausted, the challenge for the Board will be to re-think their approach and likely their team in order to manage a successful conclusion and exit from this round of bargaining.

Viacom, Time Warner Cable settle contract dispute – Los Angeles Times