The hit series “The Walking Dead” is coming under the microscope for what is alleged to be a “huge AMC profit scam.” It wasn’t that long ago that actor Frank Darabont sued for what he believed to be unfair practices in the profit sharing for the series. He is now joined by four producers of the show. David Alpert, Glen Mazzara, Gale Anne Hurd and Robert Kirkman are also seeking compensation in a lawsuit that could top $1 Billion in potential damages. AMC has seen record ratings as the series hits some impressive viewing numbers. Profits are up but what impact will the lawsuits have on the future of the show?
Recently filed
The creator of the show, Robert Kirkman and producers filed suit against AMC on Monday, alleging that they have been “massively cheated.” This could be the largest case of it’s kind to rock the television industry, and it is one that is deserving of attention. Companies that seek to merge and consolidate to achieve maximum growth, are under scrutiny as inequities result when successes go through the roof.
Multiple lawsuits against AMC
Frank Darabont has his own case which is separate from the Monday filing. Darabont worked on “The Walking Dead” project with Kirkman as co-creator of the series. He was formerly the executive producer during the first season and was let go during the second season. His suit is requestioning $280 Million in damages. The first case has been ongoing and has reached the summary judgment stage in the process. He leads others in seeking to remedy a gross mistreatment by AMC. It is becoming obvious that the network has those who were instrumental in creating the series have not received their fair share of profits. It was Kirkman’s comics that served as the inspiration and the basis for the show. The four producers seeking damages are still working on the series, but are actively pursuing a case against the network. We can’t help but wonder if the forward moving lawsuit will bring an end to the series, and how it will affect the network itself.
Details of the lawsuit
The case alleges that AMC has failed to keep up its end of the bargain to the parties listed in the lawsuit. The people who are behind the creation and forward movement of the show have not received what was promised to them. The suit was filed in the Superior Court of Los Angeles. It further points out that the network has structured its operations to create a vertical integration of the corporate structure that intertwines exhibition of the show with production. They believed this would allow them to legally keep most of the profits for themselves and not share with the creative talents, as stipulated in their original contracts.
Nature of the charges
According to documents filed in the LA Superior Court, the plaintiffs are claiming breach of contract, fraudulent or unfair business acts and interference under the California business code. These are serious charges that are set to expose the AMC network for not paying the AMC studio the amount of profits that are rightfully owed them. They are both a part of the same conglomerate which strongly suggests that there has been an attempt to make the profit sharing scam “seem” legal, although it probably isn’t. It’s one of the biggest profits scams to hit the industry so far.
Profit sharing and profit hiding
The network is under scrutiny from the Darabont lawsuit that includes an investigation into the companies practices of keeping a mind boggling amount of money that they are not booking into revenue. It appears that they are finding other accounting methods for placing the staggering earnings into other areas in order to avoid the requirement to pay creators the agreed upon percentage for profit sharing. There are so many different creative accounting methods that can be used to funnel funds into other areas including overhead for marketing and other line items. This doesn’t make it legal though.
AMC charges case is “opportunistic”
When asked about their side of the argument, AMCs response was that the latest lawsuit is something that happens in Hollywood fairly often. It’s nothing new and the spokesperson continued by adding that they generally crop up whenever there is such massive success. They are not to only network to be the target of such litigation. They cite that they attempt to defend themselves against “this baseless and predictably opportunistic lawsuit.” They did mention that the network is still working with the plaintiffs and still see them as partners in the creation and production of the show.
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