AMC Wins Profit-Sharing Dispute Against ‘Walking Dead’ Producers

This still is taken from the official season eight trailer for “The Walking Dead” unveiled in July 2017 at San Diego Comic-Con.

LOS ANGELES (CN) — The legal battle over profits of “The Walking Dead” TV series between the producers and AMC ended on Wednesday, as a California judge ruled in favor of the cable network.

A bench trial held in February and March in Los Angeles County Superior Court clawed through the fine print of the TV contracts for “The Walking Dead” comic creator Robert Kirkman and producers David Albert and Gale Anne Hurd. The multi-day trial involved testimony detailing how the popular zombie apocalypse comic book series came to life on TV in 2010.

During contract negotiations in 2009, AMC sought to be both the production studio and distributor of “The Walking Dead.” Kirkman and the other plaintiffs argued they were not fairly compensated after the show became wildly successful. During the bench trial, the parties reviewed the defined profits of those contract agreements.

The producers said AMC improperly calculated their compensation, while AMC claimed the creatives were seeking to have the court rewrite their contracts.

In a 59-page decision, Judge Daniel Buckley said the plaintiffs’ lawyers and AMC vigorously negotiated compensation during contract negotiations, with each side understanding the terms.

The producers argued that AMC was shortchanging them because with other AMC hits like “Breaking Bad” or “Mad Men,” the network paid licensing fees to third-party studios. But “The Walking Dead” was a whole new creature as it was produced and distributed all in-house and those fees were paid into a pool meant to stand in for the licensing.

Each episode generated a fee when the shows aired on AMC and amounted to about $2 million according to court filings, which remained constant over the last nine seasons.

The plaintiffs argued that fee was not part of their original contracts. They asked the court to impose a new rate based on industry custom and practice, but Buckley didn’t bite.

“Upon consideration of the contracts, the record, the parties’ arguments, and the law, defendants’ position is correct,” Buckley wrote in his decision. “The case must be decided based on the plain terms of the agreements and New York contract law.”

Buckley said that the language in the contracts are unambiguous and shows the fees that were defined by AMC are binding. The gross receipts of the shows set by AMC were not meant to be negotiated at some future date, wrote Buckley.

“The court cannot rewrite the parties’ contacts or treat their agreement that “MAGR shall be defined” by AMC as if it were meaningless,” he wrote.

When “The Walking Dead” shambled onto the AMC, the network had full rights to produce the series and even though the rights were transferred to a subsidiary for administrative purposes, it was irrelevant, according to the decision.

“When AMC and Kirkman contracted in 2009, Kirkman granted to AMC nearly unlimited rights to produce, broadcast and distribute the show,” the ruling states.

This means that Kirkman isn’t owed a license fee to have the show broadcast on AMC.

Wednesday’s decision could certainly provide ammunition for AMC, which is in another legal dispute with “The Walking Dead’s” original showrunner, Hollywood veteran Frank Darabont, and Creative Artists Agency in New York state.

“Today’s decision is a total victory for AMC,” said AMC attorney Orin Snyder with Gibson Dunn in a statement. “The judge found in AMC’s favor on all seven issues that were presented at trial and confirmed that AMC honored its contracts and paid Mr. Kirkman and the other plaintiffs what they were owed.”

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