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Unions and Your Company: A Cautionary Tale (The Ringer)...

Most of the readers of this blog are leaders, managers of people and HR pros. That means many of you have union avoidance either directly or indirectly in your job descriptions, meaning part of your job is to create a culture and employee relations environment where unions aren't necessary.

But some of you have probably thought, what would a union look like - would it be as bad as Ringer2I'm told?

I'm here today with a brief story that most of you probably missed in the news this week. Note that this is not a terrible tale of union relations or behavior gone bad (I'll leave that to the experts), but a cautionary tale of what can happen when you grow soft and allow others to drive your point of view related to whether unions are a good thing or not.

Here's the story.

I'm a big fan of a sports site called The Ringer, founded by long time sports personality Bill Simmons, a talented guy you can read about here.  Here's the chronology of what has gone down:

1--Bill Simmons founded The Ringer in 2017, investing his own money and taking capital from entities like HBO.

2--Bill Simmons is a slightly left of center sort, and has openly talked about his displeasure with the Trump administration, etc - specifically on podcasts on The Ringer. He also had a long history of issues with management when he was an individual contributor at ESPN.

3--Sensing ownership that grew up in the journalism business, was left leaning and might be more open than most owners to a union, staff at The Ringer made the aggressive move at organizing and announced their intent to organize in August 2019 via social media, which by the way, is a big part of how to The Ringer markets to the world.  You can see that tweet announcing the intent by clicking here.

4--The public display of organizing had the intended affect of pressuring Simmons to recognize the union without a process or election. As writers at The Ringer came forward one by one to announce their support and liberal Twitter weighed in, the pressure on Simmons was real. He had attempted to build something different at The Ringer and succeeded, but he had been anti-management during his time as a high-paid employee of ESPN and was on the record politically.  To take the organizers through a process saying that they didn't need representation would seem hypocritical.

5--Simmons ultimately folded. Less than 4 days after the group announced their intent to organize, Simmons opted to voluntarily recognize the union without a process. For all the aforementioned reasons, he didn't much of a choice, and he may have thought this was a great outcome.  See the story of the recognition in Variety here.

6. Everybody celebrated and went back to work.

7. January 2020 (that's right, 4 months later): Spotify is reported to be in talks to buy The Ringer, with the true target likely being the 20-30 podcasts that the Ringer has built - not the website. Business rationale - podcasts at the Ringer are very successful, and every minute Spotify pushes users to original content is a minute they don't have to pay royalties to the music industry. 

8. After Spotify's M&A intent was reported, The Ringer Union (that's what they call themselves on twitter) started demanding access to information repeatedly and generally flopping around with the expectation they have perfect clarity of any intent by Simmons to sell and what it means for them. You can see the frantic tweets here and here.  There's a bunch more, and a bunch of retweets of their messages. Of course, I'm not an attorney, but I'm pretty sure with Spotify being a publicly traded company, there's no way for Simmons to satisfy his union here.  Information=Insider Trading.

9. The lesson? There are many unintended consequences of the path taken by The Ringer Union and Simmons.  I'm detailing them below:

--By voluntarily recognizing a union, you're likely to making the entity brash and bold for the future. The public tweets from The Ringer Union during the M&A activity are exhibits 1-29.  They actually are asking for a Slack update on the negotiations. 

--The fact that you've activated a vocal union is likely to impact negotiations on any strategic deal you want to make. Whoever the stakeholders are related to ownership, it's not going to been seen as a positive and could impact the deal size or the willingness to close.

--Now for the real issue. By this union being bold, vocal and critical, management serving up voluntary recognition and the vast majority of the union members not being in the part of The Ringer that Spotify values in the acquisition (podcasts), the entire scenario of events leading to recognition actually makes the union members LESS SECURE in a Spotify acquisition than they would have been if they were union-free. Put yourself in Spotify's shoes - if you're buying the podcasts and aren't sure you want to continue with the money losing website, you might look at the vocal union and say... No thanks. We'll take the podcast operation only.

Of course, Simmons can be a hero and say no if Spotify has the intent of dismantling the website/traditional news/social media operation. But the path to quickly voluntary recognize the union has actually made the union employees LESS SECURE in a world where The Ringer sells, which it was built to do.

I like the journalism at The Ringer. I hope the website survives. But there's a big chance it won't, and recognition of a union plays a part.

Unintended consequences everywhere.

Comments

Susan Larkin

I thought for sure this was going to be about the moron from Barstool Sports.

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