Did you think the story came to an end after Frank Darabont finally shared his thoughts on being fired from his duties as showrunner of The Walking Dead by AMC just after the shortened first season made the show one of the most popular to ever air on TV screens? If so, you would be very much incorrect.
In fact, Darabont and his agents at CAA (Creative Artists Agency) claim they are owed “tens of millions of dollars” by AMC, and are suing the company because of this. The lawsuit was filed today in New York, and accuses AMC of using something known as “self-dealing” to try and avoid paying money to creative talent.
Apparently this all began in February of 2011, when there was a standoff between the two parties regarding Darabont’s profit participation. It’s thought that this is the reason he was ultimately terminated, and to this day he has not received one dollar of that profit participation he was owed.
Of the lawsuit, Darabont’s lead lawyer, Dale Kinsella, tells The Hollywood Reporter’s Hollywood, Esq.:
“AMC’s conduct toward Frank to date has been nothing short of atrocious. Unfortunately, the fans of The Walking Dead have suffered as well by being deprived of his creative talent.”
According to the lawsuit—which is among the many that have been filed over the years dealing in what’s called “vertical integration” cases—Darabont, as the series’ creator and developer, is contractually entitled to a percentage of a pool of money that’s put together known as Modified Adjusted Gross Receipts (“Profits”), and as such, his agency is also entitled to a cut of that percentage.
But here’s where AMC allegedly uses some evil genius tactics.
See, Darabont is said to have reached a deal where the show would be produced by an unaffiliated studio (such as Lionsgate or Warner Brothers, for example), and he would get as much as 12.5% of that studio’s final profit. Instead, AMC decided to set up an operation where the production and broadcasting of the show are both handled by arms of parent company AMC—basically they licensed the show to themselves in what’s called a “sweetheart deal.”
Darabont smartly acted on this decision, attempting to protect himself against any manipulation of the license fees by ensuring that he had a written legal agreement that he would be paid fair market value in regard to any deals involving AMC affiliates instead of an unaffiliated third party, to which AMC agreed.
AMC then is said to have pulled a power move; using a bit of trickery, the company set up a formula that imputes a license fee that’s millions of dollars lower than what they would have had to pay said unaffiliated third party companies like Lionsgate or WB (because it’s all within the wallet of AMC). This, effectively, means that The Walking Dead would always appears to be massively in deficit for as long as it’s on the air, despite its astronomical ratings and popularity, meaning anyone who’s due a percentage of the profit participation pool, as Darabont was, would simply be out of luck. Ouch.
In the report filed, AMC even claimed in 2012—two years into the show’s existence, and when it was already booming with popularity—that they were at a deficit of $49 million, which Darabont’s representatives say “is clearly designed to ensure that [Darabont and CAA] never see that first dollar.”
As mentioned earlier, this is not the first time tactics like this have been used. Other hit TV shows that were involved in these vertical integration self-dealing cases include Home Improvement, The X-Files, Will & Grace, and Smallville. And knowing AMC’s rocky past—given, of course, that this is all proven in a court of law—one has to wonder if these same issues are the reason the company has had so much trouble with other creative talent on both The Walking Dead (second showrunner Glen Mazzara was also fired) and other shows. It even got to the point where showrunners of other hit series on other networks had to speak out against AMC.
This is all just a fraction of the complaint filed by Darabont and CAA. If interested, and if you have the time, you can read through the entire 74-page PDF document right here.