The stakes are far higher than either side admits publicly.
The surprising reality of the Writers Strike is that the Companies truly believe they had no choice but to force the writers to strike. This is not because the Networks want to write off a bad season in 2007, or because the Companies want to void expensive overall deals. That money is chicken feed compared to what is truly on the table.
Here's what's going on, and it's chillingly simple: by forcing Writers and Actors to accept a fraction of their rightful share of DvD sales twenty-odd years ago, the Companies saved over ten billion dollars. If the Companies can do the same with the Internet, they stand to save that amount many times over. The Companies are employing a cold but somewhat logical strategy. In foregoing a certain amount of current revenue - perhaps as high as the value of an entire season of TV - they hope to save tens of billions in the distant future.
Before negotiations with the Writers began, the Companies said to their negotiator, Nick Counter: "This is how much of our future profits we are willing to share with the Guilds, and this is how long we can wait before we have to get back to work." And then they concluded, "between now and that certain deadline, get the Guilds as far below our maximum as you possibly can."
So Nick did his usual dance - pretend to negotiate with Writers, and then try to cut a deal with Directors that can be used against the Writers. Why does Nick prefer the Directors Guild? Because it is more reasonable or powerful than the other Guilds? It's not necessarily either of those things. No, Nick prefers the Directors simply because they are the least expensive Guild. Half of the DGA's members don't depend on residuals, as do all of WGA and SAG. Nick has given DGA preferred status over the years, granted it early negotiations, and declared it "powerful," simply so he can try to use DGA deals to apply pressure on WGA and SAG.
And just as Nick tries to use DGA as a front to pressure the Writers, he tries to use the Writers as a front to try to weaken SAG. SAG is Nick's ultimate quarry, not just because it is large and beloved by the public - but because it's the most expensive Guild. Every residual WGA gets, SAG contractually gets three times more. Nick's cynical strategy of using the Directors to force a bad deal on the Writers, so that the Writers deal will apply to the Actors, has worked more or less perfectly for thirty years.
So what's different this time around? The stakes. Just as the Companies are looking at higher stakes than ever before, so are the Writers. This time around, probably to the consternation of the Companies, Nick has gone too far. The deal he laid before the Writers is bad in the short run, but in the long run, disastrous. "New Media" is an inaccurate term. It's no longer new, and in a few years, it will encompass all Media. By trying to cut writers out of New Media, Nick has declared that he wants to cut them out of the business altogether.
But as many wars have taught us, imperial powers routinely underestimate what people will do to protect their homeland. While the Companies are only fighting to avoid sharing profits that the writers will earn for them in the future, the Writers are fighting for their professional lives.
The clock is quietly ticking toward the secret deadline the Companies gave Nick. That deadline could be February, or, God forbid, September, depending on how much the companies have decided to invest in this strategy. But it will come. And for every indication that Nick's old tactics may be working, there are ten never-before-seen indications the Writers are stronger than ever.
Where did the Companies go wrong? In not studying the current WGA. The signs that Nick's thirty-year old strategy might not work this time around were evident three years ago, when Patric Verrone and nine prominent writers announced their "Writers United" slate. For the first time, a slate of WGA candidates campaigned together, organized vote captains, developed a functioning, de-centralized organization that led to the largest voter turnout in Guild history and virtually every member of the slate beating all other candidates by a two to one margin. In case the Companies weren't paying attention three years ago, Verrone and his Writers United slate repeated the feat last year, winning reelection overwhelmingly with an unprecedented turnout strongly indicative of a well-oiled, mature organization.
If the Companies weren't paying attention then, it's hard to believe they aren't paying attention now. With solid public support for writers, sustained picket lines, SAG and other union support, the Worldwide Pants deal in TV, the UA deal in film, and the "inevitable" negotiations with DGA already behind schedule, the Companies may soon have little choice but to reconsider their strategy. However "logical" it may be to lose a billion now to avoid sharing tens of billions others have earned for you, it's another thing entirely to lose a billion now and then have to share the rest of the money, anyway.
Read more strike coverage on the Huffington Post's writers' strike page.