Studio chiefs act as peacemakers

Los Angeles Times Staff Writer

Months of sporadic talks with the Writers Guild of America had been fruitless.

Bargaining sessions last summer and fall with the writers had become bogged down by the sheer number of people involved: more than a dozen corporate labor-relations executives, lawyers and staff members of the Alliance of Motion Picture and Television Producers.

Then, in a plot twist not seen in decades, not since Hollywood was ruled by the iron-willed studio boss Lew Wasserman, two corporate chiefs took charge of the negotiations.

Once News Corp. President Peter Chernin and Walt Disney Co. Chief Executive Robert Iger got involved, it took less than a month to finalize a contract with writers that is expected to end the devastating three-month strike that has cost the Los Angeles economy hundreds of millions of dollars.


On Sunday, Writers Guild board members ratified a new three-year contract with the major studios. The WGA’s 10,500 members will vote Tuesday on whether to end the strike and are expected to be back to work on Wednesday.

“We spent six months in a room with people who did not want to negotiate with us,” David Young, WGA executive director, told 3,500 striking writers who trudged into the Shrine Auditorium in Los Angeles on Saturday night to learn details of the tentative deal. “All of this that we have here today was negotiated over the last two or three weeks with two CEOs who were willing to negotiate.”

By early January, Chernin and Iger had been selected by their fellow chief executives to bring labor peace to Hollywood after perceived missteps by the alliance’s professional negotiators and angry rhetoric coming from both sides.

In some ways, the two executives were an odd couple. Three years ago, Chernin had been considered the favorite to eventually replace Michael Eisner as chief executive of Disney, the job that Iger coveted. But Chernin stayed at Fox, and Iger landed the Disney job.

Although Chernin and Iger had slightly different priorities and substantially different styles, they shared a common goal: to end the writers strike that began Nov. 5.

Chernin was a logical choice. Shrewd and savvy, Chernin could alternate between being disarming and charming but then, in an instant, switch gears to show his steely side. Chernin had worked in most of the areas of the business. He started in publicity at a book publishing house, went on to the Showtime cable channel and joined Fox in 1989. He ran Fox’s broadcast and television production business. He was in charge of the Fox film studio for four years before becoming president and chief operating officer under media maverick Rupert Murdoch in 1996.


Even in early November, he was predicting how the strike would unfold. WGA leaders, he told people around him, would have difficulty keeping their group united because the thousands of individual members would have different philosophies and financial circumstances. The companies would be able to exploit the natural divisions within the WGA by first coming to an agreement with another union, the Directors Guild of America.

His prediction was spot on. By late last year, the strike threatened to cripple the industry for much of 2008. Some powerful show runners, who oversee TV’s biggest programs, were threatening to go back to work.

Other strident WGA members, who were insistent on extracting major concessions from the companies, were willing to picket until summer when their sister union, the Screen Actors Guild, could join their strike. The current SAG agreement expires June 30.

For their part, top executives of the eight companies that make up the Alliance of Motion Picture and Television Producers -- News Corp.’s Fox, Walt Disney Co., Warner Bros., CBS Corp., NBC Universal, Paramount Pictures, Sony Pictures Entertainment and MGM -- knew they had just one opening to get negotiations back on track.

The chiefs realized that a quickly crafted deal with the friendlier DGA would set a new tone and establish a framework for agreements with the WGA and SAG. Instead of dispatching a phalanx of lawyers and labor relations specialists to do their bidding, as the companies had done with the writers, the chiefs had to do it themselves.

But Chernin, 56, was unwilling to be the lone front-man for the companies, said one executive close to the negotiations.

Iger also was integral to the group’s success. The stoic executive, 57, runs Southern California’s largest entertainment company and was intensely interested and familiar with the value of new media and Internet issues that were paramount to the writers.

Like Chernin, Iger had risen through the ranks of the media world. Iger, who had joined ABC television as a studio supervisor in 1974, had moved through sports, entertainment and eventually to the corporate suites. He was president of ABC when Disney acquired the company in 1996. He had negotiated many labor agreements in his role as head of the ABC television network.

Iger also had a decades-long friendship with Gil Cates, chairman of the DGA negotiating committee, who serves as director of Hollywood’s biggest gala, the annual Academy Awards, which has been televised by ABC since 1976.

In addition, Iger was viewed by some writers as perhaps more conciliatory than Chernin. The strike had stalled Disney’s lucrative TV production unit, and ABC’s ratings were slipping because its blockbuster dramas, such as “Grey’s Anatomy” and “Desperate Housewives,” don’t perform well in repeats. Disney was eager to end the strike to salvage the television season and secure the Feb. 24 Oscar telecast, which provides the company tens of millions of dollars in profit.

Meanwhile, Fox’s business units were humming along, and the strike was having little effect on its network. Fox TV had two weapons in its arsenal, “American Idol” and the Super Bowl, which this month brought the company $250 million in ad revenue.

Chernin was the hawk. Iger was the dove.

Together they negotiated a deal with WGA executive director Young, WGA President Patric Verrone and John Bowman, the head of the WGA’s negotiating committee.

“The absolute most important turning point was when Peter Chernin and Bob Iger took the negotiations on for themselves,” said Carlton Cuse, a member of the WGA negotiating committee and an executive producer of ABC’s hit drama “Lost.” “That was the key to the whole process. They were reasonable and they bargained fairly.”

In January, Chernin told investors that although Fox could weather the strike for months, it was important to get the town back to work.

“Putting aside the writers, I think [the strike] is having a tremendously negative effect on a lot of very innocent people,” Chernin said at an investors conference in Arizona.

“Not only people in the entertainment industry, the below the line workers, the craft workers, but frankly people who run the local dry cleaners and the local florist shops,” he said. “There is a significant and serious economic impact on the city of Los Angeles, and I feel a sense of responsibility to do anything I can to solve that.”

Times staff writer Maria Elena Fernandez contributed to this report.