UPDATED: All along the issue, the really big issue, was whether the striking writers would still feel united if some of them went back to work and others stayed on the picket lines. I’ve learned that was just one of the many worries voiced by the WGA to the posse repping Worldwide Pants when it applied for an interim agreement allowing the two late night shows it owns, The Late Show With David Letterman and The Late Late Show With Craig Ferguson, to return to the air on January 2nd fully staffed with scribes. “It was a tough decision,” a source close to Letterman acknowledged to me just now. “This happened by the slimmest of all possible margins.” So tough that Dave’s negotiating team didn’t know whether the pact would be approved by the WGA until the very last minute today.

It was, finally, at midday following several meetings and a lot of phone calls, sources say. The Letterman camp — which included Worldwide Pants CEO and longtime Late Show exec producer Rob Burnett, ex-CAA partner and now Worldwide Pants exec Lee Gabler, and the Hollywood entertainment law firm of Jackoway Tyerman and Wertheimer — was sworn to secrecy until the WGA could first talk to Jay Leno and his writers and then produce a press release. But the news leaked out early, reputedly from Leno’s side.

“I am grateful to the WGA for granting us this agreement. We’re happy to be going back to work, and particularly pleased to be doing it with our writers,” Letterman said in a statement issued by his company. “This is not a solution to the strike, which unfortunately continues to disrupt the lives of thousands. But I hope it will be seen as a step in the right direction.”

On the one hand, this is the first side deal cut by the WGA with a producer since the strike began on November 3rd as part of its new and articulated “divide and conquer” strategy. “Worldwide Pants has accepted the very same proposals that the Guild was prepared to present to the media conglomerates when they walked out of negotiations on December 7,” the WGA said in its announcement today.

But I’m told the WGA leadership was particularly worried how Leno’s writers would react since it gives Letterman’s show a real leg up on late night competition for guests like celebrities and politicians (i.e. Democratic presidential contenders who don’t want to cross picket lines). “I don’t think they wanted to upset Jay or those writers because they’ve all been incredibly supportive of the WGA during this strike,” an insider explained to me. “But it’s not Jay’s writers’ fault that Dave’s lawyers made a deal for him to own his show and Jay’s lawyers made a deal for him to be an NBC employee.”

Indeed, the WGA statement announcing the deal took care to note how “it’s time for NBC-Universal to step up to the plate and negotiate a company-wide deal that will put Jay Leno, who has supported our cause from the beginning, back on the air with his writers.”

But a statement by SAG prez Alan Rosenberg hailing the deal underscored the huge advantage which Letterman’s two shows will have booking big celebrity guests — an endorsement by the actors guild itself: “Screen Actors Guild members will be happy to appear on The Late Show with David Letterman and Late Late Show with Craig Ferguson with union writers at work and without crossing WGA picket lines,” Rosenberg made clear.

Another argument against granting the interim agreement was that Worldwide Pants didn’t control the New Media rights to Letterman’s shows. But CBS said in its statement issued tonight: “CBS controls the Internet exploitation rights for both programs, and will comply with any eventual negotiated agreement between the AMPTP and the WGA.” But then Letterman’s side showed that its company and not CBS is the one responsible for paying residuals to the WGA writers for Internet use of the shows.

Still another argument, and perhaps the most convincing, was that by granting the interim agreement the WGA would enrich CBS which collects the ad revenue from Dave’s shows and therefore help the AMPTP. Indeed, the AMPTP’s own statement accused WGA’s negotiators of “misrepresenting the fact that Worldwide Pants is an AMPTP member”.

But inside the WGA, a source told me, “the question was whether the hurt felt by NBC in late night would be worse than the benefit given to CBS. Some people didn’t accept that. Those people also wanted to make a side deal with a much bigger company than Worldwide Pants,” an insider told me. “But there was an actual strategy behind today’s decision.”

That strategy goes something like this: In order for this gambit to work to the WGA’s benefit, two things must happen: Leno’s writers can’t go Financial Core, and SAG has to tell its people to only go on Dave’s shows. “Then you have Jeff Zucker in huge pain. You also have to remember that Les Moonves has very little power in the AMPTP. Jeff Zucker and Jeff Immelt have much more power in the AMPTP. If they see their Tonight Show franchise going down the tubes, they’ll put a lot of pressure on the other CEOs to return to the talks,” a source explained. “In the final analysis, they hoped this is a watershed.” (I can confirm that, at one point, Dave’s camp argued that NBC would break ranks with the AMPTP and do a side deal with the WGA in order to save its late night lineup, especially with Conan O’Brien about to succeed Jay Leno. But, in the end, no one at the WGA bought into that, so Letterman’s side dialed it back.)

But now there may be rifts within the WGA over the deal.

Before today’s announcement, I received phone calls and emails from some well-known WGA members, especially feature film writers, angry that the WGA was even contemplating such an agreement while at the same time dumping those issues important to screenwriters like possessory credit, free rewrites and endless meetings without pay. They told me they planned to stop picketing and possibly go Fi-Core over what they see as a strike that’s become more about television that movies.

Tonight I’ve managed to reach one of those successful screenwriters who phoned me and he’s furious. “I’m going back to work,” he said, asking me not to use his name. “I have gotten five phone calls tonight from feature writers and every single one of them has said some variation on, ‘Bullshit on this. Why am I looking at staying out of work until April when these guys are going to start picking up paychecks on Tuesdays?'”

The writer continued: “All you’re doing every time a movie or TV star goes on Letterman is making money for a member of the AMPTP. If you’re going to strike GM, then you strike GM. You don’t say, ‘We’re going to give a waiver to the guys making pickup trucks because they’re really good guys.'” You don’t maintain solidarity by letting a handful of guys go back to work. So what’s next: Lorne’s people go back to work? Then Colbert’s people go back to work?

“I read the reasoning behind this on your site just now that they’re trying to break Jeff Zucker. Are they out of their minds? NBC Universal’s numbers are a rounding error in the grand scheme of General Electric. All GE has to do is sell one power plant in Dubai and it covers the entire revenue stream of NBC Universal.”

But another successful feature film writer, Mike Werb (The Mask, FaceOff, Lara Croft: Tomb Raider) just told me he applauds the Letterman deal and doesn’t see it as divisive. “I’m thrilled for the Letterman writers and for Letterman that as one of the most important people in the entertainment business he can take this stance. From my point of view, I don’t see any negatives in this deal. To me, it just serves as an example of how a side deal can be made. Personally, I applaud Worldwide Pants whether there’s a domino effect or not to be seen. If the deal is acceptable to the guild, it’s completely acceptable to me. That’s why I was one of the 90% who voted to empower this strike and my partners in this, which is the negotiating committee.”

Werb noted that during the last writers strike in 1988, he was working for a firm that also secured an interim agreement with the WGA, Sam Arkoff’s AIP, and recalled no controversy over that deal. “You never heard any arguments. People seemed happy.” Nor does Werb think there’s a movie vs TV writer schism developing. “I can tell you that during this strike now I’ve been on the picket lines every day and the spirit is significantly stronger this time than then. I’ve met so many screenwriters and TV writers all fusing together.”

Here are the various statements about today’s decision:

First, the WGA’s email to its own members about the decision:

To Our Fellow Members, We are writing to let you know that have reached a contract with David Letterman’s Worldwide Pants production company that puts his show and The Late Late Show with Craig Ferguson back on the air with Guild writers. This agreement is a positive step forward in our effort to reach an industry-wide contract. While we know that these deals put only a small number of writers back to work, three strategic imperatives have led us to conclude that this deal, and similar potential deals, are beneficial to our overall negotiating efforts. First, the AMPTP has not yet been a productive avenue for an agreement. As a result, we are seeking deals with individual signatories. The Worldwide Pants deal is the first. We hope it will encourage other companies, especially large employers, to seek and reach agreements with us. Companies who have a WGA deal and Guild writers will have a clear advantage. Companies that do not will increasingly find themselves at a competitive disadvantage. Indeed, such a disadvantage could cost competing networks tens of millions in refunds to advertisers. Second, this is a full and binding agreement. Worldwide Pants is agreeing to the full MBA, including the new media proposals we have been unable to make progress on at the big bargaining table. This demonstrates the integrity and affordability of our proposals. There are no shortcuts in this deal. Worldwide Pants has accepted the very same proposals that the Guild was prepared to present to the media conglomerates when they walked out of negotiations on December 7. Finally, while our preference is an industry-wide deal, we will take partial steps if those will lead to the complete deal. We regret that all of us cannot yet return to work. We especially regret that other late night writers cannot return to work along with the Worldwide Pants employees. But the conclusion of your leadership is that getting some writers back to work under the Guild’s proposed terms speeds up the return to work of all writers. Side-by-side with this agreement, and any others that we reach, are our ongoing strike strategies. In the case of late-night shows, our strike pressure will be intense and essential in directing political and SAG-member guests to Letterman and Ferguson rather than to struck talk shows. At this time, picket lines at venues such as NBC (both Burbank and Rockefeller Center), The Daily Show, The Colbert Report, and the Golden Globes are essential. Outreach to advertisers and investors will intensify in the days ahead and writers will continue to develop new media content itself to advance our position. We must continue to push on all fronts to remind the conglomerates each and every day that we are committed to a fair deal for writers and the industry. Best,

Michael Winship

President

Writers Guild of America, East Patric M. Verrone

President

Writers Guild of America, West

Then the WGA’s public statement:

“The Writers Guild has reached a binding independent agreement today with Worldwide Pants that will allow The Late Show with David Letterman and Late Late Show with Craig Ferguson to return to the air with their full writing staffs. This is a comprehensive agreement that addresses the issues important to writers, particularly New Media. Worldwide Pants has accepted the very same proposals that the Guild was prepared to present to the media conglomerates when they walked out of negotiations on December 7. Today’s agreement dramatically illustrates that the Writers Guild wants to put people back to work, and that when a company comes to the table prepared to negotiate seriously a fair and reasonable deal can be reached quickly. It’s time for NBC-Universal to step up to the plate and negotiate a company-wide deal that will put Jay Leno, who has supported our cause from the beginning, back on the air with his writers.”

From David Letterman’s Worldwide Pants:

Worldwide Pants Incorporated, David Letterman’s independent production company, announced today that it has agreed to terms with the Writers’ Guild of America on an interim agreement that will allow The Late Show With David Letterman and the Late Late Show With Craig Ferguson to resume production on January 2, 2008, with the writing staffs of both shows. “I am grateful to the WGA for granting us this agreement. We’re happy to be going back to work, and particularly pleased to be doing it with our writers,” said Letterman. “This is not a solution to the strike, which unfortunately continues to disrupt the lives of thousands. But I hope it will be seen as a step in the right direction.” “This is a positive result, both for the WGA and for our shows, and we are appreciative that the leaders of the Guild dealt with us reasonably and in good faith,” said Rob Burnett, President and CEO of Worldwide Pants and Executive Producer of The Late Show. The January 2nd original episode of The Late Show With David Letterman will air at 11:37–12:37 AM, ET/PT on CBS. Guests will be announced at a later date.

And finally from the AMPTP:

“While it is good news for viewers that the jokes will be back on the late night shows, the biggest joke of all appears to be the one the WGA’s organizers are pulling on working writers. The people in charge at WGA have insisted on increasing their own power by prevailing on jurisdictional issues such as reality, animation and sympathy strikes. Yet today the WGA made an interim agreement to send writers back to work that by definition could not have achieved these jurisdictional goals — gains that would at a minimum require the company making an agreement to actually produce reality and animation programming. WGA’s organizers are also misrepresenting the fact that Worldwide Pants is an AMPTP member. Today’s agreement is just the latest indication that the WGA’s organizers may not have what it takes to achieve an industry-wide deal that will create a strong and sustainable economic future for writers and producers alike.”

From Screen Actors Guild president Alan Rosenberg: