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Frank Darabont’s Firing Detailed in Latest ‘Walking Dead’ Lawsuit Filings
Cynthia Littleton @Variety_Cynthia
JULY 13, 2017 | 05:24AM PT

Frank Darabont’s “erratic and unprofessional performance” as showrunner of “The Walking Dead” led
to his firing in July 2011, according to the latest round of court filings in Darabont’s lawsuit against AMC Networks over his profit participation in the hit drama series.

AMC and Darabont filed motions for summary judgment early Thursday in New York Supreme Court. AMC is seeking to have the case dismissed while Darabont’s team is looking for a ruling on the specific test that should applied to the fairness of an element of the contracts he struck with AMC for the show in 2010 and 2011. The sides are expected to argue the motions in court on Aug. 24. Darabont first sued AMC in late 2013.


AMC’s latest filing included a host of supporting documents, including a copy of an expletive-laden email Darabont sent to “Walking Dead” executive producer Gale Anne Hurd and others.

AMC’s filing paints a picture of Darabont being overwhelmed by the demands of running a television series but unwilling to take advice or direction from others. Darabont, a three-time Oscar nominee, had little experience in TV before he shepherded the adaptation of Robert Kirkman’s “Walking Dead” graphic novel for AMC.

“I am in a state of boiling rage right now,” Darabont wrote in a 2011 email to Hurd regarding problems with production on the first episode of “Walking Dead’s” second season. “Everybody especially our directors better wake the f— up and pay attention or I will start killing people and throwing bodies out the door.” In an email from 2010, Darabont vented his anger at two writers on the show, saying he should have “hunted them down and f—ing killed them with a brick, then gone and burned down their homes.”

In a deposition excerpt included in AMC’s filing, former AMC programming chief Joel Stillerman described Darabont’s shortcomings as his inability to deliver scripts on time, to adequate supervise the writers room and to manage the budget of series. What’s more, Darabont’s “volatile and disturbing interactions with staff and talent were impacting production,” the filing states.

In Stillerman’s deposition he asserts that Darabont “was quite bad at his job.” As work on season two began in 2011, AMC had “grave concerns” that Darabont’s management of the show “was so poorly handled that we gauged them to be jeopardizing the enterprise itself and certainly the long-term sustainability and success of that series.”

In an affidavit responding to AMC’s filing, Darabont said that the personal allegations are irrelevant to the lawsuit. He also sought to put the emails in context, saying that they were sent “during an intense and stressful two-year period of work during which I was fighting like a mother lion to protect the show from harm.”

“Each of these emails was sent because a ‘professional’ showed up whose laziness, indifference, or incompetence threatened to sink the ship of production and added unfair and unnecessary burden to their colleagues in the cast and crew,” Darabont wrote. “My tone was the result of the stress and magnitude of this extraordinary crisis. The language and hyperbole of my emails were harsh, but so were the circumstances. As for the enormous problems they describe, I stand by these emails to the last detail.”

Darabont’s suit maintains that AMC has breached its contract that called for him to receive 15% of the profits (or modified adjusted gross receipts) from the show. AMC counters that his contract called for his profit participation stake to rise to 15% only if he completed all of season two as showrunner and executive producer. AMC’s filing maintains that Darabont has been paid 10% to 11.875% of the profits depending on the level of his contribution to various episodes.

In a statement on Thursday, Darabont’s attorney, Dale Kinsella, said that AMC had recently increased its payouts to Darabont and CAA, but that the amount is a “mere fraction” of what they are owed.

“Unfortunately, this litigation gamesmanship by AMC and the Kasowitz firm is too little and too late, and in no way relieves AMC of its contractual liability to our clients,” Kinsella said. “Furthermore, Mr. Darabont’s emails are an irrelevant distraction from the real issues in the case. We look forward to arguing the motions on August 24, and to the Court granting plaintiffs’ motion and denying AMC’s motion.”

The crux of the of the suit is the battle over Darabont’s allegations that AMC engaged in self-dealing with the “imputed” license fee that AMC pays for the show. Because the series is produced by AMC Studios, Darabont’s camp asserts that AMC paid a license fee for the show that was woefully below market value for the massive hit that “Walking Dead” became. The low license fee limits the pool of potential profits to be shared by participants like Darabont and CAA, which reps Darabont and earns a packaging fee on the show.

AMC counters that there was no self-dealing because there never was a formal license fee agreement between the two AMC divisions. The imputed license fee formula was used for the purposes of setting profit participation deals. AMC’s filing includes details from other “Walking Dead” profit participants, including current showrunner Scott Gimple and exec producer Greg Nicotero, who agreed to the same imputed license fee definition that Darabont has challenged.

According to contracts included in the filing, the original formula for the fee was that it would be calculated at 65% of the cost of production with a cap of $1.45 million in season one. The cap would rise to $1.75 million in season two, with 5% bumps per season thereafter.

Darabont’s filing asserts that the test to be applied in gauging the fairness of the license fee should involve comparing “Walking Dead” fee to those AMC paid to outside studios for other shows, notably Sony Pictures TV on “Breaking Bad” and Lionsgate TV on “Mad Men.” AMC argues that it rejected Darabont’s lawyer’s efforts to insert that language in his contract. Instead, AMC agreed to give Darabont a “favored nations” clause ensuring that if any other profit participant on “Walking Dead” negotiated a deal that called for a more generous definition of the imputed license fee, Darabont’s definition would rise accordingly. According to AMC, that recently happened in a deal negotiated by Nicotero.

The filing also includes detail of contracts signed by notable talent on other AMC projects that accepted AMC’s imputed license fee formula, including “The X-Files” creator Chris Carter.

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"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."

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AUGUST 14, 2017 3:37pm PT by Eriq Gardner
'Walking Dead' Producers Claim Massive AMC Profits Scam in New Lawsuit
Robert Kirkman, Gale Anne Hurd, Glen Mazzara, and David Alpert follow Frank Darabont in suing over the blockbuster zombie series, and potential damages could reach $1 billion.

AMC has enjoyed record ratings for The Walking Dead, but will it survive a legal apocalypse? On Monday, in what could become the biggest ever profits case in television history, and one that deserves widespread attention as merger-hungry media companies grow ever more vertically consolidated, Walking Dead co-creator Robert Kirkman and notable series producers Gale Anne Hurd, Glen Mazzara, and David Alpert have filed suit against AMC with the allegation they've been massively cheated.

The new case follows the one from Frank Darabont, the show's other co-creator, who was fired as executive producer in the middle of the second season and is demanding $280 million in an accounting lawsuit that has reached the summary judgment phase. Now, the other key creatives on the series are targeting significant damages of their own. With the participation of Kirkman, whose comic books served as source material for Walking Dead, and Hurd and Alpert, who continue to work on the series, AMC finds itself in court against those whose ongoing involvement is crucial to Walking Dead's and perhaps AMC's future.

"This case arises from a major entertainment conglomerate’s failure to honor its contractual obligations to the creative people – the 'talent,' in industry jargon – behind the wildly successful, and hugely profitable, long-running television series The Walking Dead," opens the complaint filed Monday in Los Angeles Superior Court. "The defendant AMC Entities exploited their vertically-integrated corporate structure to combine both the production and the exhibition of TWD, which allowed AMC to keep the lion’s share of the series’ enormous profits for itself and not share it with the Plaintiffs, as required by their contracts."

Here's the full complaint. The claims are breach of contract, inducing breaches, and unfair or fraudulent business acts under California business code.

In response, AMC says the lawsuit is fairly common in the industry. (See full reaction below.)

Like Darabont's lawsuit, the plaintiffs are questioning the amount "paid" by AMC Network to AMC's studio arm for the right to air the show. Because the companies are affiliated with each other, what's seen on Walking Dead profit participation statements are imputed license fees, meaning a stand-in figure that doesn't really mean that money has exchanged hands. During the first four seasons of Walking Dead, AMC was imputing a fee of $1.45 million per episode. That's now up to $2.4 million, but is still less than the non-imputed license fees of Better Call Saul (a Breaking Bad spinoff) and Mad Men, which are produced by non-affiliated Sony and Lionsgate, respectively, and don't command NFL primetime-type ratings as Walking Dead does.

"There can be no question that, if AMC Studio[s] and AMC Network were not part of the same conglomerate, the story would be very different," states the complaint, later adding, "Those substantial license fees for Mad Men and Breaking Bad continued in seasons five and beyond, even though their ratings were a fraction of TWD’s. And while the AMC Network only obtained a limited number of playdates for those series as part of the comparatively-higher license fees it paid for them (both on television and its affiliated websites), the AMC Entities unilaterally took for themselves the right to run an unlimited number of runs of TWD in perpetuity on all AMC platforms."

Darabont and his CAA agents in their own lawsuit are leaning on financial experts to make the case that the series should be imputing up to $30 million per episode, which over seven seasons would represent a staggering amount of money that AMC's isn't booking in revenue.

Kirkman, Hurd, Mazzara and Alpert haven't yet gotten to the point of suggesting what the precise imputed license fee should be, but that's only a matter of time. In the meantime, they are running through other alleged ways they've been denied a fair share of profits. Among them are deductions taken by AMC for payments to other Walking Dead profit participants. They also object to how AMC turned down an offer from another party for international rights to the series "so that [AMC] could do a related-party deal for much less than the related party offered, again keeping the profits at conglomerate level and not passing them through to AMC Studios and the participants."

The lawsuit, being handled by Ron Nessim and other lawyers at Bird, Marella, speaks of the decades-long rise of vertical integration in entertainment and media. The subject has always been controversial and continues to be so as a giant like AT&T proposes to buy a conglomerate like Time Warner. Over the years, creatives in Hollywood have been leery of the power concentration and have reacted to corporations both producing and distributing content with litigation. Past lawsuits over films from the Police Academy series to This Is Spinal Tap have accused studios of manipulating the amount of money going in and the expenses going out so as to essentially make profits disappear through practices like packaging, distribution fees, and marketing overhead.

"Hollywood accounting" is hardly a secret anymore, however, so when studios and talent come to deals with each other these days, the negotiators representing talent are mindful of how things can go wrong. That doesn't mean there's no room for ambiguity and continued legal fighting.

Kirkman, whose deal entitles him to 5 percent of profits from Walking Dead, came to what his attorneys say was a "related-party provision" that guaranteed that AMC's transactions with affiliated companies would be on monetary terms comparable to transactions with non-affiliated companies. Alpert, who got 2.5 percent of profits, Hurd, who got 7.5 percent, and Mazzara, who took over Darabont's role as the showrunner for a couple of seasons and got 1.5 percent, each cite provisions in their own deals including most-favored-nations clauses that allegedly amounted to self-dealing protection.

In other words, the Walking Dead executive producers say they thought they had it all figured out only to be blindsided.

AMC, of course, hasn't yet filed any response to the latest lawsuit, but in the Darabont case, AMC has been arguing that license fees for Mad Men, Breaking Bad and other shows are irrelevant as the imputed license fee itself became the answer to calculating contingent compensation in the context of studio licensing to its network affiliate. Represented by Marc Kasowitz and others at his firm, AMC has contended that fee reflects a fair negotiation and suggested that those upset are now trying to achieve through post-agreement litigation what the couldn't through pre-deal negotiation. AMC has also touted millions of dollars recently sent to profit participants.

In response to the newest lawsuit, an AMC spokesperson says, "These kinds of lawsuits are fairly common in entertainment and they all have one thing in common – they follow success. Virtually every studio that has had a successful show has been the target of litigation like this, and The Walking Dead has been the #1 show on television for five years in a row, so this is no surprise. We have enormous respect and appreciation for these plaintiffs, and we will continue to work with them as partners, even as we vigorously defend against this baseless and predictably opportunistic lawsuit."

Next week, a New York judge will hold an oral hearing about the summary judgment motions in the Darabont case. What already was going to be a consequential showdown has now become even more so by multiples thanks to this newest case. Although the Kirkman lawsuit doesn't specify a target for compensatory and punitive damages, based on what Darabont's lawyers have computed, damages could approach a billion dollars. But even putting aside the huge monetary stakes, the fight over how AMC has treated accounting on the most successful cable television show ever will be felt in the industry for quite some time. It will surely influence new dealmaking moving forward.

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