In a tentative decision, an L.A. judge dismissed Robert Kirkman’s most substantial claims involving The Walking Dead, potentially marking the conclusion of his lawsuit.
A Los Angeles judge had to answer a simple question when it came to deciding whether or not to demolish the cornerstones of an earnings battle fought by Walking Dead creator Robert Kirkman and several executive producers, all seeking a bigger share in the hit zombie series: Did AMC intentionally design its agreement so that the series’ creators would never share in profits?
On Friday, Judge Daniel Buckley indicated that he is leaning toward determining that AMC did not reverse engineer its contracts in order to shortchange Kirkman. The decision will significantly reduce the amount of money at stake in this dispute over cable’s highest-rated television season ever.
The court granted summary judgment in favor of the network on claims for breach of the implied covenant of good faith and fair dealing as well as tortious interference in a tentative ruling. The case is still before the court, pending audit claims.
In 2020, AMC scored a major victory after prevailing in a high-profile case over allegations that it defrauded profit participants of revenue from the show’s licensing to its affiliate cable network. According to Buckley, the agreements contain language requiring acceptance of AMC’s modified adjusted gross receipts (MAGR) definition, which is defined as the revenue generated by the
However, the case was resurrected in July when Buckley ruled that Kirkman, Hurd, Alpert, and Mazzara are allowed to pursue new legal theories by amending their claims.
AMC, in its comments on the amended lawsuit claims, labeled them as a bid for a “do-over.”
AMC and Kirkman’s attorneys went head to head during an in-person Friday hearing over AMC’s intentions when it created its MAGR definition, as well as whether AMC’s licensing fees are fair in comparison to the rest of the market.
The plaintiffs’ lawyer, Sheldon Eisenberg, claimed that AMC acted in bad faith by suggesting a contract with “a fundamental structural flaw” that “made it impossible for Kirkman to earn contingent compensation.”
“AMC had to have done something with this definition that deprives Kirkman of what he reasonably expected — some profit participation if the show was successful,” he said. “We’re talking about the most successful show in history of cable television.”
One of Kirkman’s primary claims is that AMC gave its affiliate a sweetheart deal to license The Walking Dead because his fees are not competitive when compared with other networks. Looking at other networks, like CBS, if the program is among the top 10 rated shows, CBS will pay 100% of production costs back after five years, in addition to deficit reimbursement for prior years if it is amongWithout those provisions, Eisenberg said it’s “basic TV economics” that there cannot be a positive MAGR figure.
Scott Edelman from AMC replied that it makes no difference what other networks provide. The question is not whether the contract is out of sync with the market, according to Edelman.
“The test is, ‘Did AMC craft a MAGR definition with the intent to harm these particular plaintiffs and deprive them of contingent compensation?’” he said. “There’s just no evidence AMC did so.”
Edelman emphasized that the network has used the same MAGR definition in hundreds of other contracts. He suggested that it wouldn’t have done so unless it was as bad as Kirkman claims, since AMC’s conditions need to be competitive in order to attract talent.
In the end, Buckley did not indicate that he intended to reverse his tentative decision. If the case goes to trial, he will no longer be in charge of it since he retires in May.
“I thought that at least one thing that would be resolved is if it’s MAGR or M-A-G-R,” he quipped.
Kirkman’s attorneys have indicated that if the court follows its preliminary decision, they will refuse to enter into mediation. They are expected to appeal Buckley’s ordered summary judgment.
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