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When it comes to The Walking Dead, series creator Frank Darabont is just like the living dead. He was fired during the second season, but continues to haunt AMC with a ravenous appetite for more money.
Along with his agents at CAA, Darabont is pursuing a potentially landmark vertical integration claim in New York Supreme Court — accusing AMC of shortchanging him on contingent profit participation by producing the zombie series and then licensing it to its cable network affiliate for an allegedly low imputed license fee. Darabont’s lawyers call this quintessential self-dealing. AMC defends its practices by arguing it negotiated the right to set the imputed license fee when it agreed to not charge a hefty distribution fee.
Last August, Darabont amended his lawsuit to add an additional claim that once the litigation began, AMC improperly reduced his profit share. As the one who first developed Walking Dead and brought it to AMC, Darabont was entitled to get as much as 10 percent of profits from the series, but because he was terminated in the middle of the second season, AMC only counted him as three-quarters vested, meaning he only got 7.5 percent. Additionally, for the episodes of the second season after he was fired, AMC denied him an additional 2.5 percent of profits as Walking Dead showrunner.
AMC responded to the new claim by cutely remarking, “Contracts are not screenplays. They cannot be unilaterally be unwritten simply because one party dislikes the ending.”
In a bid to have the new claim rejected, the defendant pointed to the “vesting” and “removal” provisions of its deal with Darabont and the series’ creator’s admission that he was terminated before the conclusion of the second season. AMC argues that the contracts required Darabont to perform “full-time” on all episodes.
On Tuesday, in papers obtained by The Hollywood Reporter, Darabont’s attorneys responded to the argument with screenshots of all 13 episodes of the second cycle of Walking Dead. He’s listed as an executive producer in each. The plaintiffs say “the evidence is clear that during the time Darabont was employed full-time during Season 2, he worked on all the episodes of Season 2, including episodes that were not completed until after his removal.”
The debate over how to interpret the contract comes down to figuring out whether Darabont met the pegged milestone. AMC suggests that what’s important is that Darabont wasn’t full-time at the end of the second season while Darabont responds that continued employment wasn’t a “condition precedent” to such profits.
It’s a wonky issue, but one with potentially millions on the line, especially if a judge or jury later finds that AMC should have imputed a larger license amount for the series to hand over to profit participants. A hearing on this issue before the judge is scheduled for later this month.
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