A co-creator of "The Walking Dead" comic book and three producers of "The Walking Dead" show are suing AMC, saying despite record-setting profits, the network has been underpaying them.
They argue a loophole has allowed the network to basically short itself. To understand the case, you first have to know how TV shows are made.
Normally the network's not the one that films the episodes. Other AMC favorites like "Mad Men" and "Breaking Bad" were shot by production companies, like Lionsgate and Sony.
The money flows like this — networks pay production companies a licensing fee to air the show. The production companies then pay the people who created the show based on the size of the licensing fee.
"The Walking Dead" follows this model — but with a twist. AMC owns the company that films the show, too, so it's effectively paying itself.
The lawsuit argues the network has no incentive to give a higher licensing fee. And since the creators make money from that fee, they're getting paid less in the process.
As proof, the lawsuit points back to "Mad Men" and "Breaking Bad," which both made less money for the network than "The Walking Dead" yet commanded higher licensing fees.
This latest lawsuit joins one filed by Frank Darabont — the series' developer and former showrunner — who is still suing AMC for similar charges.
The Hollywood Reporter says if the producers of "The Walking Dead" win the lawsuit, they could be awarded as much as $1 billion in damages.
AMC told The Washington Post the lawsuit is "baseless and predictably opportunistic." But the Post notes AMC will likely settle to avoid setting a legal precedent.
