As The Walking Dead is headed into its final episodes of its final season, just like the show’s walkers coming back to life, so is the battle for hundreds of millions of dollars of the show’s profits. In July, an L.A. court reignited a profit dispute waged by Walking Dead creator Robert Kirkman and several executive producers, allowing them to pursue new legal theories, but AMC is now battling back by claiming that the court doesn’t have the authority to rewrite its contracts.
AMC won in a high-profile trial in 2020 over allegations that it underpaid profit participants from money distributed for licensing the program to its affiliate cable network. The agreement between the parties required AMC’s definition and calculation of modified adjusted gross receipts (MAGR), or revenue minus distribution fees, costs, and production expenditures, according to Judge Daniel Buckley.
But the matter didn’t conclude there. Buckley permitted Kirkman, Hurd, Alpert, Eglee, and Mazzara to amend their claims for breach of the implied good faith and fair dealing covenant as well as tortious interference. The first allegation is based on allegations that AMC knew about the show’s popularity before negotiating a right to define MAG
The second allegation alleges that AMC induced its subsidiary, which was not supposed to have direct knowledge of the parent company’s transactions, to breach its obligations. AMC argued that the modified allegations were a “do-over” attempt after being defeated in court.
Plaintiffs want to “sweep away the contract interpretation trial as if it never happened, and obtain what this Court ruled they could not get: a court-created MAGR definition they never negotiated for and to which the parties never agreed,” according to the motion filed on Friday.
The claim is based on the belief that Kirkman and the producers will not be able to pursue a court order directing AMC to strike and reinterpret their agreements with them because the issue was previously ruled upon.
To establish damages, plaintiffs would have to persuade a jury that MAGR should be calculated in some other way. AMC claimed that if the definition is not used, then Buckley’s previous decision would be meaningless.
“Because the parties did not implicitly agree to a court rewriting the MAGR definition to comply with some judicially imposed definition of reasonableness, fair market value, or industry standards, Plaintiffs cannot recover damages for their implied covenant claim—and the claim fails,” wrote Scott Edelman, a partner at Gibson, Dunn & Crutcher, in the motion for summary judgment.
Discovery, according to AMC, proved that there is no evidence to support allegations that it designed a MAGR term to specifically limit recovery by the producers. Hundreds of other profit participants for numerous TV shows are covered by the same contract, according to AMC. AMC, which was a tiny television company with no previous programming at the time when Kirkman signed his contract, set its licensing fee at 65% of production costs.
“The undisputed evidence demonstrates that AMC did not deprive Plaintiffs of the benefits of their contracts—rather, AMC canvassed the market and selected a market-competitive imputed license fee that was equivalent to, and often better than, the terms offered by other cable networks,” the motion states.
On the tortious inference allegations, AMC argued that it is not responsible for breaching its own agreement. A summary judgment hearing is set for April 1 with a trial scheduled to start on May 2.
What do you think of the continued battle between AMC and The Walking Dead‘s main creator and producers? Let us know in the comments below!
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