Robert Kirkman, one of the creators of “The Walking Dead” graphic novel and show, the show’s producers and former show runner Glen Mazzara have filed suit against the AMC Network and its parent company AMC Studios. The complaint cites breach of contract as the dispute and seeks unspecified damages.
The dispute relates to the definition of profits from the show and how those profits are distributed. In a standard contract for a television show, the plaintiffs, claim, a profit would be declared and distributed to profit participants if the production company were profitable. By contrast, profits the network makes from exhibiting the show are not shared with profit participants. In this situation, however, the production company is AMC Studios and the AMC Network is part of the same conglomerate.
This structure leads to pernicious consequences, the plaintiffs claim. They believe powerful financial incentives are at work, and that the AMC Network has arranged not to pay a fair-market-value licensing fee to AMC Studios. This keeps AMC Studios from declaring a profit to be shared with the creators and producers. Instead, AMC Network receives more than its fair share of the income the show produces.
If the network and production company were unrelated, the plaintiffs claim, the production company would command much higher licensing fees. In other words, AMC Studios is allegedly allowing itself to be low-balled on licensing fees in order to direct more income to its parent company.
They also claim AMC has used improper deductions and other unfair methods to prevent the creators and producers from participating fairly in the show’s true profits.
“Plaintiffs and the other talent behind TWD [The Walking Dead] are the ones whose work to create, develop, write and produce the series has brought its huge success, but the fruits of that success have not been shared as they should be,” the lawsuit states.
Another of the co-creators, Frank Darabont, has also sued AMC in a separate action. The lawsuit, which was filed over four years ago, is expected to go to trial next year. Darabont also claims that AMC cheated him out of his fair share of the show’s profits. He is seeking $280 million in damages.
With respect for the plaintiffs’ talent, AMC calls the claims by Kirkman and the others “baseless and predictably opportunistic,” and commented that “virtually every studio that has had a successful show” has faced similar litigation.