The Walking Dead fans were shocked yesterday when producer (and creator of The Walking Dead), Robert Kirkman, and four other current and former producers on The Walking Dead TV series, filed a lawsuit against AMC claiming breach of contract, tortious interference and unfair or fraudulent business acts under California business code.
That’s a lot of legalese, so many of us are probably wondering what it all really means, what is the basis of their complaint and how much of it is tied to former The Walking Dead producer (and creator of the TV series) Frank Darabont’s own lawsuit against AMC? We’ll try to break it down for you as as best as we can.
IT ALL BEGAN WITH FRANK DARABONT
In 2013, Frank Darabont (and his representation, Creative Artists Agency) sued AMC for wrongful termination after Darabont was fired after just a single season of the hit television series. However, Darabont also sued over breach of contract, claiming that AMC was paying him less than he was owed based on the profit participation clauses in his original contract with AMC.
That lawsuit has been steadily chugging along for years, and as it nears a possible conclusion (arguments for Summary Judgment for both sides are set for the end of August), it is clear that the investigative accounting done as part of Darabont’s lawsuit has inspired the other producers to make a similar claim to Darabont, who is seeking nearly $300 million dollars in damages from AMC.
WHAT IS VERTICAL INTEGRATION, AND HOW DOES IT FACTOR INTO THIS LAWSUIT?
Vertical integration is when a corporation both produces and exhibits its products. For instance, nearly every major drama on CBS nowadays is produced by CBS Television Studios. Therefore, no matter how the shows make money, the ultimate winner is CBS. The Walking Dead is one of the very first shows that AMC decided to try using vertical integration on, after their past hits, Breaking Bad and Mad Men, were both created by outside studios (SONY Television produced Breaking Bad and Lionsgate Television produced Mad Men). Therefore, AMC controls every aspect of The Walking Dead TV series, including where it streams online. They get all of the money. The issue, though, is that the plaintiffs believe that AMC is hiding a large portion of that money from the plaintiffs, who all get to participate in the show’s profits.
WHAT IS THE LICENSE FEE?
The license fee is the fee that is charged by the studios who produce a TV show to the network. These rates are typically at a lower level early on, but if the show continues to do well, the studio can charge larger and larger license fees, later. Oftentimes, one of the reasons why otherwise popular television shows eventually go off the air is that the shows just get more and more expensive the longer they are on the air, and eventually the networks just say, “Enough is enough.”
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