The Walking Dead: AMC wins lawsuit over profits

AMC gets a major victory in the court case over The Walking Dead profits

Earlier this year, AMC became embroiled in a lawsuit over profits for The Walking Dead. Robert Kirkman, the creator of The Walking Dead, was a party to the lawsuit, along with executive producers Gale Anne Hurd, David Alpert, Charles Eglee, and Glen Mazzara. The suit alleged that AMC took more than its fair share of the shows’ profits.

A Los Angeles judge ruled that AMC had interpreted the contract correctly.

“Today’s decision is a total victory for AMC,” AMC attorney Orin Snyder at Gibson Dunn, told The Hollywood Reporter. “The judge found in AMC’s favor on all seven issues that were presented at trial and confirmed that AMC honored its contracts and paid Mr. Kirkman and the other plaintiffs what they were owed. As the court found, these plaintiffs had the most sophisticated lawyers and agents in Hollywood and they got what they bargained for. We are now turning our attention to the trial in New York — which involves very similar claims by CAA and Frank Darabont — secure in the knowledge that the first court to hold a trial on these issues ruled completely in AMC’s favor.”

The five plaintiffs have been fighting for a larger share of the show’s profits since 2017, and a suit involving Darabont remains pending in New York. It’s scheduled for trial next year.

The dispute hinges on how the show is broadcast. AMC Film Holdings licenses it to AMC Network. The fight is over whether AMC is paying its sibling company fair-market value – or what it would pay after negotiations, if it were getting the rights to the show from a third party.

Kirkman and the rest essentially claim that AMC would’ve paid more to a third party, thus they’d be owed more. Kirkman argued that his 2009 contract requires AMC to pay an “actual license fee.” Instead, the company has been “imputing” – meaning assigning a value – of about $2 million per episode. So the case concerns at least two things: Is AMC allowed to assign that value, and if so, are the fees subject to a provision that requires them to be fair-market value?

AMC’s defense is that the plaintiffs had agreed to the terms it set forth, including its method of calculating the profits. The plaintiffs counter by arguing that former AMC head Charles Collier had promised to share profits fairly, and there was no long-term deal agreeing to AMC’s terms.

Fear the Walking Dead and post-episode talk show Talking Dead were also examined, to see if the plaintiffs were owed anything from those shows.

Los Angeles County Superior Court Judge Daniel Buckley ruled that AMC could define how profits from the broadcasts were collected and that the contracts ruled out any arguments about fairness. He also ruled that AMC’s imputing was allowed and therefore Kirkman wasn’t owed more.

He also concluded that it’s unlikely that Kirkman’s representatives wouldn’t have known that AMC would impute fees when the contract was negotiated, and that Hurt’s and Alpert’s contracts stated that AMC would impute fees.

The case has been closely watched because entertainment companies are acting as their own distributors more often, distributing their own shows on streaming platforms. The outcome of the case could factor into how future deals are structured.

The full ruling can be read here.