’Walking Dead’ creator sues AMC over profits
Los Angeles • The creator of "The Walking Dead" is suing AMC over what he claims is an effort to deny him tens of millions of dollars in profit from the hit drama.
Oscar-nominated writer-director Frank Darabont ("The Shawshank Redemption," "The Green Mile") and Creative Arts Agency filed suit Tuesday in New York Supreme Court against defendants including AMC Network Entertainment LLC.
Their suit claims that despite four seasons of "unprecedented programming success and profitability" for the defendants, Darabont hasn’t received any profits for developing the series.
AMC declined Wednesday to comment on the suit, which also alleges that Darabont was fired as producer without cause. He developed "The Walking Dead" from Robert Kirkman’s comic book series about zombies.
The lawsuit alleges that AMC decided to produce the series in-house and paid itself a deliberately low license fee to air it, engaging in what the suit labels "the improper and abusive practice of ‘self-dealing.’"
"The sole goal of this sham transaction is to enhance the profits of the parent company by minimizing the revenues that go into the ‘pool’ of funds for the show’s profit participants," the suit alleges.
The suit reflects others filed by creators of successful TV shows, including "Will & Grace." When a studio licenses a show to be aired by an affiliated network or cable channel, the fee can fail to reflect fair market value and diminish payments to creators and others, such lawsuits argue.
Darabont’s legal action follows his clouded exit from "The Walking Dead" early in its second season and critical public comments he has made about AMC.
His suit claims that a formal agreement called for him to be paid as if the series were produced by an unaffiliated studio engaging in "true arm’s length negotiations over license fees."
As of December 2012, two years after the show debuted, AMC’s participation statements show "The Walking Dead" had a $49 million deficit to overcome before Darabont or CAA would see "their first dollar of profits."
"AMC’s sham imputed license fee formula is clearly designed to ensure plaintiffs never see that first dollar," the suit contends.