The Walking Dead Lawsuit Settled, AMC Pays Frank Darabont & CAA $200 Million

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TVweb 16 July, 2021 - 05:03pm 5 views

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While Lincoln left The Walking Dead in Season 9, there's been rumors that he might make an appearance in the show's final season. These are just rumors, however, though he's confirmed to reprise Rick Grimes in a movie trilogy. ... Season 11: Part I of The Walking Dead will premiere Aug. 22 on AMC. SYFY WIREThe Walking Dead “trailer” reminisces about Rick Grimes and gives first brief footage of Season 11

AMC Networks has settled a lengthy legal dispute with filmmaker Frank Darabont and the Creative Artists Agency for $200 million over the cable network owner's long-running zombie series "The Walking Dead."

This settlement comes less than a month before the series kicks off its eleventh and final season. 

In the settlement, filed Friday to the SEC, AMC buys all the rights to "The Walking Dead" and all related spinoffs from Darabont, executive producer and creative force during the first two seasons of "The Walking Dead." In addition to the cash payment, the settlement provides revenue sharing for future streaming exhibitions of "The Walking Dead" and "Fear The Walking Dead" to Darabont.

Darabont is an Oscar-nominated filmmaker who directed "The Shawshank Redemption." 

The settlement also includes covenants not to sue, confidentiality and waivers, among other provisions. 

AMC said it took a charge of $143 million related to the settlement during the quarter ending June 30.

Darabont and CAA first launched a lawsuit in late 2013, when the series was among the most popular on television. Darabont and company had sought approximately $300 million in profit participation payouts, and the trial for the lawsuit was set to start in April 2022. 

Darabont's attorney and CAA did not immediately respond to CNBC's requests for comment.

"The Walking Dead," based on Robert Kirkman's comic, premiered in 2010 and spawned spinoffs "Fear the Walking Dead" and "The Walking Dead: World Beyond." Its final season premieres Aug. 22.

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‘Walking Dead’ Lawsuit Settled For $200M Between Frank Darabont, CAA & AMC

Deadline 17 July, 2021 - 11:01am

Senior Editor, Legal & TV Critic

Less than a month before The Walking Dead kicks off its 11th and final season, the long and bitter legal war between former showrunner Frank Darabont, CAA and AMC is over.

In the dictionary definition of a strategic whimper not a bang, the cabler just filed paperwork with the SEC declaring that they have paid out $200 million to the Shawshank Redemption director and the uberagency to end the dispute.

“The Settlement Agreement provides for a cash payment of $200 million (the “Settlement Payment”) to the plaintiffs and future revenue sharing related to certain future streaming exhibition of The Walking Dead and Fear The Walking Dead,” says the understated filing (read it here).

“The Settlement Agreement also includes customary provisions included in such agreements, including providing for mutual releases, covenants not to sue, waivers, confidentiality, non-disparagement and indemnification for third party claims.”

All of which means almost 10 years since TWD‘s Halloween 2011 premiere under Darabont’s tutorage, this legal saga is done like a walker with a knife through the head.

While a bit of a surprise after almost a decade of harsh words, personal and corporate humiliation, and hyperbole, the timing of the deal makes sense. The TWD Universe is set to see the mothershow wrap up in the next couple of years with a supersized conclusion and several spinoffs to take flight. That growth would undoubtedly see more projects added to Darabont and CAA’s complaint under the spinoffs aspect of the ex-showrunner’s contact. Additions that could increase their demands by tens if not hundreds of millions.

Launched back in late 2013 at the near height of the blockbuster zombie apocalypse series’ popularity, the Blank Rome and Kinsella Weitzman Iser Kump Holley represented EP & CAA were seeking around $300 million in profit participation payouts in what has become a multiple lawsuit situation. Coming about two years after Darabont was unceremoniously axed from TWD, the case also spawned similar legal actions against AMC in subsequent years. Walking Dead creator Robert Kirkman as well as Gale Anne Hurd and other executive producers, past and present, have taken the once home of Breaking Bad to court over the show, its spinoffs, and big profits they say they were cheated out of.

Delayed due to the coronavirus pandemic, a trial for the Darabont and CAA suit was set to start in April 2022. Up until today’s revelation, the Praetorian Guard of pricey attorneys on both sides put forth a battle ready public face, though rumors of talks by the parties have been circulating for the past couple of months.

During the AMC’s first quarter earnings call with Wall Street analysts, company executives said they expected free cash flow of $200 million in 2021. In light of today’s announced settlement, the filing says, the company now expects free cash flow to be roughly at break-even.

AMC Networks has not set the date for its report of second-quarter earnings, but it will be over the next few weeks. First-quarter results were mixed, with profit increasing despite a 6% slide in total revenue compared with the prior-year quarter. As the pay-TV bundle dwindles, AMC Networks is increasing emphasizing its portfolio of niche streaming services, forecasting they will surpass results from traditional linear TV over the coming years.

The last season of The Walking Dead debuts on August 22 and, split into different sections,  will run for 24 episodes.

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AMC to Pay Frank Darabont, CAA $200M in Settlement of ‘Walking Dead’ Profits Fight

Hollywood Reporter 17 July, 2021 - 11:01am

By Ashley Cullins

Darabont first sued in 2013, and the battle eventually spawned a spinoff in 2018. He and CAA claim the network had used shady accounting to short them on profits. The fight largely examined the dealmaking behind AMC’s hit and centered on how to calculate its net profits.

While other hit AMC shows like Mad Men and Breaking Bad were produced by other studios, Walking Dead was the first series that AMC both produced and distributed. So this dispute served as a test case on profit sharing and vertical integration, an increasingly relevant issue as self-distributed content is prevalent in the streaming world.

The original judge seemed to favor Darabont and CAA. In fact, AMC fired its original lawyers at Kasowitz and replaced them with Gibson Dunn. The new team was able to stave off a summary judgment loss and was prepared to make the trial all about how Darabont had been represented in the original contract negotiation by sophisticated lawyers and agents, and was merely trying to use litigation to renegotiate a better deal.

In April, an appeals court trimmed Darabont’s case, but the key issue of interpreting the contract was set to go to a jury in April 2022.

The settlement resolves all litigation and buys Darabont and CAA out of most of their rights to the intellectual property from the franchise.

“The Settlement Agreement provides for a cash payment of $200 million (the “Settlement Payment”) to the plaintiffs and future revenue sharing related to certain future streaming exhibition of The Walking Dead and Fear The Walking Dead,” states AMC’s July 16 report to the U.S. Securities and Exchange Commission. “The Company has taken a charge of approximately $143 million in the quarter ended June 30, 2021 in consideration for the extinguishment of Plaintiffs’ rights to any compensation in connection with The Walking Dead and any related programs and the dismissal of the actions with prejudice, which amount is net of approximately $57 million of ordinary course accrued participations. The Settlement Agreement also includes customary provisions included in such agreements, including providing for mutual releases, covenants not to sue, waivers, confidentiality, non-disparagement and indemnification for third party claims.”

Neither party is commenting beyond the SEC filing.

The parallel fight from other profit participants, including Walking Dead graphic novel creator Robert Kirkman, is ongoing and currently scheduled for trial this November, with a June backup date set in case of a pandemic delay. AMC’s lawyers say Darabont’s settlement doesn’t impact that litigation.

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