"The Walking Dead" Creator and Producers Sue AMC over Profits in New Lawsuit

[JamesG]

"The Walking Dead" Producers Claim Massive AMC Profits Scam in New Lawsuit
by Eriq Gardner
8/14/17


AMC has enjoyed record ratings for "The Walking Dead", but will it survive a legal apocalypse?

On Monday, in what could become the biggest ever profits case in television history, and one that deserves widespread attention as merger-hungry media companies grow ever more vertically consolidated, "Walking Dead" co-creator Robert Kirkman and notable series producers Gale Anne Hurd, Glen Mazzara and David Alpert have filed suit against AMC with the allegation they've been massively cheated.





The new case follows the one from Frank Darabont, the show's other co-creator, who was fired as executive producer in the middle of the second season and is demanding $280 million in an accounting lawsuit that has reached the summary judgment phase.

Now, the other key creatives on the series are targeting significant damages of their own. With the participation of Kirkman, whose comic books served as source material for "Walking Dead", and Hurd and Alpert, who continue to work on the series, AMC finds itself in court against those whose ongoing involvement is crucial to "Walking Dead's" and perhaps AMC's future.





"This case arises from a major entertainment conglomerate’s failure to honor its contractual obligations to the creative people — the 'talent,' in industry jargon — behind the wildly successful, and hugely profitable, long-running television series The Walking Dead," opens the complaint filed Monday in Los Angeles Superior Court.

"The defendant AMC Entities exploited their vertically integrated corporate structure to combine both the production and the exhibition of TWD, which allowed AMC to keep the lion’s share of the series’ enormous profits for itself and not share it with the Plaintiffs, as required by their contracts."





Like Darabont's lawsuit, the plaintiffs are questioning the amount "paid" by AMC Network to AMC's studio arm for the right to air the show. Because the companies are affiliated with each other, what's seen on "Walking Dead" profit participation statements are imputed license fees, meaning a stand-in figure that doesn't really mean that money has exchanged hands.

During the first four seasons of "Walking Dead", AMC was imputing a fee of $1.45 million per episode. That's now up to $2.4 million, but is still less than the non-imputed license fees of "Better Call Saul" and "Mad Men", which are produced by non-affiliated Sony and Lionsgate, respectively, and don't command NFL primetime-type ratings as Walking Dead does.

"There can be no question that, if AMC Studio[s] and AMC Network were not part of the same conglomerate, the story would be very different," states the complaint, later adding, "Those substantial license fees for Mad Men and Breaking Bad continued in seasons five and beyond, even though their ratings were a fraction of TWD’s. And while the AMC Network only obtained a limited number of playdates for those series as part of the comparatively-higher license fees it paid for them (both on television and its affiliated websites), the AMC Entities unilaterally took for themselves the right to run an unlimited number of runs of TWD in perpetuity on all AMC platforms."





AMC, of course, hasn't yet filed any response to the latest lawsuit, but in the Darabont case, AMC has been arguing that license fees for "Mad Men", "Breaking Bad" and other shows are irrelevant as the imputed license fee itself became the answer to calculating contingent compensation in the context of studio licensing to its network affiliate.

Represented by Marc Kasowitz and others at his firm, AMC has contended that fee reflects a fair negotiation and suggested that those upset are now trying to achieve through post-agreement litigation what they couldn't through pre-deal negotiation. AMC has also touted millions of dollars recently sent to profit participants.





In response to the newest lawsuit, an AMC spokesperson says, "These kinds of lawsuits are fairly common in entertainment and they all have one thing in common — they follow success. Virtually every studio that has had a successful show has been the target of litigation like this, and The Walking Dead has been the No. 1 show on television for five years in a row, so this is no surprise. We have enormous respect and appreciation for these plaintiffs, and we will continue to work with them as partners, even as we vigorously defend against this baseless and predictably opportunistic lawsuit."

http://www.hollywoodreporter.com/thr...awsuit-1029197