Walking Dead creator Frank Darabont is asking permission to amend his lawsuit against AMC to include an allegation that his profit participation has been improperly reduced.
Darabont and his CAA agents are currently in court pursuing claims that AMC breached his contract and deprived him of tens of millions of dollars in profits from the hit series by making a sweetheart deal licensing the show to itself. In response, AMC says it has the contractual right to set an imputed license fee for Walking Dead even if the Darabont side believes it is designed to ensure that the show would never be in profit.
The case was filed in December 2013 after Darabont was ousted. Since then, the parties have been stuck in the discovery phase and a contentious battle over AMC’s demands to see other contingent compensation agreements handled by CAA.
The dispute is probably at least a year away from trial should it not settle, and in the meantime, the plaintiffs are coming forward with some new issues.
“Several months after this litigation commenced, AMC Studios changed the way that it accounted to Darabont by issuing participation statements in a new multi-page format,” states the proposed amended complaint. “Based on this new format and deposition testimony in this litigation, it is now evident that AMC Studios has improperly reduced Darabont’s Developed By Profits from 10% to 7.5%, and improperly reduced Darabont’s EP/Showrunner Profits from 2.5% to 1.875%, in both instances treating Darabont’s Profit participation as only 75% vested.”
The legal papers say that AMC first indicated that Darabont would only be getting showrunner profits for the first six episodes of the first season, but now have determined he’s due for seven of 13 episodes for the second season.
Darabont asserts he rendered showrunner services on all second season episodes, and under the contract, this would mean he’s entitled to 2.5 percent of showrunner profits for “all episodes of the Series for the life of the Series.”
Even a small percentage shift would matter, plaintiffs say.
“If Plaintiffs prevail on the claim that Defendants’ imputed license fee is improper and well below fair market value, each individual percentage point is likely to be worth several million dollars,” states the amended complaint.
Darabont has also subtracted from his original lawsuit. He’s no longer claiming wrongful termination, acknowledging that AMC had a “pay or play” right to remove him from the series. There’s also deletion of a charge that AMC violated industry custom and practice by refusing to factor in Georgia tax credits for profit participation purposes. The original lawsuit said that the first profit participation sheet listed $100 million in Walking Dead production costs, but allegedly left unspoken was AMC receiving 30 percent back of its expenditures from the state of Georgia. Darabont is no longer pursuing a claim that AMC improperly deflated its gross receipts this way in calculating profits.
Darabont and CAA are represented by attorneys at Blank Rome and Kinsella Weitzman.