A $200 million settlement with The Walking Dead TV show creator Frank Darabont was expensive for AMC — but it might prove even more costly, as it clears a path for other creative people involved with the series to pursue legal claims that looked at one point like they might have been dead in the water. Darabont, the director of The Shawshank Redemption and The Mist, alleged that he had been deprived of money he was entitled to from royalties and merchandising when AMC used “Hollywood accounting” practices to make the series appear to be less profitable than it really was.
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In 2017, The Walking Dead producers Robert Kirkman (who also created the comic book it’s based on), David Alpert, Gale Anne Hurd, and Glen Mazzara filed a suit based on a similar premise, asking for up to $1 billion in revenue they said AMC had wrongfully withheld. The suit alleges that AMC engaged in self-dealing, “skimming,” and other unfair accounting practices, which allowed them to misrepresent the amount of money they were making from The Walking Dead and related merchandise so that they could pay the plaintiffs less than they deserved.
Darabont, the TV series’ original showrunner, had been suing AMC since 2013, andit seems as though his settlement has opened a new legal avenue for Kirkman and his co-plaintiffs in the 2017 suit. Last summer, Judge Daniel Buckey delivered a pretty devastating blow to the case, saying that AMC had properly calculated the numbers and seeming to side with the network, which argued the producers had attorneys who understood the contracts and allowed their clients to sign off on the terms.
This summer, Buckley ruled again, allowing the suit to move forward using two amended claims. The Hollywood Reporter had a concise breakdown of the two new arguments when they dug into the ramifications of the ruling:
“The first is alleged breach of the implied covenant of good faith and fair dealing. According to this latest theory, AMC knew it had a unilateral right to craft the MAGR term, waited until success of the series, and then specifically crafted defined profits to ensure plaintiffs would not recover under the circumstances. And the other is alleged tortious interference. This theory (one that may soon be imitated by others in the entertainment world) is that AMC Network — which didn’t have direct contractual relations with the show’s producers — had knowledge of its sister company’s dealings and intentionally induced a breach for its own advantage.”
This ruling, of course, is not a win for Kirkman and his fellow producers; what it does is give them an opportunity to argue their case, which it previously looked like they might not get. That said, this case is being watched by a lot of people, since any ruling one way or another is likely to have long-lasting effects on the way Hollywood makes deals.
