‘Walking Dead’ creator sues AMC over in-house sweetheart deal

KWIKA founding partner Dale Kinsella was quoted in several entertainment publications about The Walking Dead creator Frank Darabont’s lawsuit against cable TV channel AMC for creative bookkeeping designed to shut out Darabont and other profit participants.

In spite of being the highest-rated scripted series on television, AMC says the show is running a deficit and therefore has nothing left over to pay profit participants like Darabont.  The lawsuit claims that AMC licensed the show in-house rather than through an independent studio, a practice which has generated litigation involving several other hit series including Home Improvement, The X-Files, Will & Grace and Smallville.

The problem is that the license fee is typically the source of payment to profit participants, so when a producer like AMC licenses a series to a “friendly” (i.e., in-house) studio, there’s always the question of whether the fee reflects fair market value since it wasn’t an arm’s-length negotiation.

Dale comments:  “AMC’s conduct toward Frank to date has been nothing short of atrocious.  Unfortunately, the fans of The Walking Dead have suffered as well by being deprived of his creative talent.  The success of this particular series is somewhat unprecedented because it has obliterated the distinction between cable and network TV.”

For all the details, see the articles in The Hollywood Reporter, Variety and the L.A. Times.