Why the New Deal for the 'Walking Dead' Makeup Guru Deserves a Place in Hollywood Lore

Giving Greg Nicotero a profit percentage was no routine give for AMC.

No one should begrudge the fact that special makeup effects guru Greg Nicotero is now getting a piece of the profits for The Walking Dead. As a four-time Emmy award winner who makes zombies seem authentically frightening, he probably deserves every penny of what he'll get from a new deal executed this past March by AMC. Still, his amended agreement is absolutely astounding in context and deserves further discussion.

As detailed this morning, Frank Darabont and CAA are in the midst of a massive profit participation dispute with AMC. The litigation is spilling all sorts of secrets. Nicotero's new deal is among them. He's not only getting one percent of defined profits, but more crucially, his deal improves the imputed license fee for the show — to about $2.4 million an episode (which is still less than what Sony gets for Better Call Saul despite inferior ratings). 

A couple comments need to be made about the circumstances.

First, the summary judgment process in this Walking Dead litigation is hardly routine. More than six months ago, the parties came to an agreement whereby they would exchange briefs and exhibits with each other, and after figuring out what should be in the public record and what should remain confidential, disclose those documents publicly. Typically what happens is that parties just file summary judgment briefs, oppositions and replies on a rolling basis — making motions for sealing if necessary. But AMC, CAA and Darabont were so concerned about privacy that in this special instance, they decided to hold back what's essentially been under file for months. The judge signed off on this side agreement.

When Nicotero got his new deal, it created a substantial piece of new evidence. AMC wants to use Nicotero's deal to show that under its interpretation of Darabont's own profit participation agreement, a most favored nations clause has real benefit. The studio can also go to the judge and say something like, "Remember when this case was first filed? Remember how Darabont and CAA claimed that the imputed license fee was designed to ensure that the series would remain grossly in deficit and that they would never see a dollar in profits? Well, guess what. Thanks to Nicotero's deal, and the ones signed by Darabont and CAA, we just had to cut checks to them for millions. They're liars."

Here's the wrinkle: The introduction of Nicotero's deal necessitated that those briefs exchanged about a half a year ago were outdated. Some, it appears, had to be altered to incorporate the new evidence or discussions surrounding it. Had the parties followed a more standard procedure for the filing of summary judgment briefs, AMC might have never had the opportunity to use Nicotero's deal to support its arguments.

And so, the attorneys for Darabont and CAA are hopping irate at the development. They are telling the judge that AMC has violated the court-blessed side agreement and want to throw out the new evidence.

Second, this was no ordinary give to Nicotero by AMC thanks to the stakes of the litigation at hand.

Darabont's team is calling the development a "self-serving stunt … plainly meant to burnish its image before the Court on the eve of argument" while AMC reacts to the other side's assertion of a "concocted" deal to tell the judge that plaintiffs are ignoring how it must now make increased payments in the tens of millions of dollars.

But given that an imputed license fee is the very thing that the parties are fighting over, would AMC really risk doing anything that jeopardized a case with hundreds of millions, if not billions, of dollars on the line? As such, one can be reasonably certain that AMC was conscious of the implications of improving the imputed license fee formula in Nicotero's new deal before agreeing to it. AMC had to know it would be dropping a grenade in the Darabont suit. How many executives and lawyers for AMC had to sign off on doing this? What sort of discussion ensued over a one-percenter?

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