Saturday, February 25, 2023

Warner Bros. Discovery Sues Paramount Global Over ‘South Park’ Licensing Dispute

HBO Max’s parent company has filed a lawsuit that accuses Paramount Global of reneging on parts of the $500 million licensing deal set in 2019 for the streaming rights to episodes of Comedy Central's hit animated series South Park.

©Comedy Central/Courtesy of Everett Collection

The suit, filed Friday (Feb. 24) in New York state Supreme Court, asserts that Paramount breached the contract by steering South Park specials and other content to its own Paramount+ platform.

The suit alleges that Paramount “blatantly intended to prop up Paramount+ at the expense of Warner/HBO,” and that Paramount engaged in “multiple and flagrant duplicitous contortions of fact and breaches of contract.”

“Warner/HBO brings this lawsuit to vindicate its rights and recover the hundreds of millions of dollars in damages incurred as a result of Defendants’ misconduct,” the suit alleges.

HBO Max set a whopping licensing pact with Paramount for rights to South Park episodes in October 2019 as then-parent company AT&T was preparing to launch the HBO Max streaming platform in May 2020.

South Park has been a staple of Paramount Global’s Comedy Central cable channel for more than 25 years. The enduring animated comedy, which hails from Trey Parker and Matt Stone, is in its 26th season and has amassed more than 300 episodes to date.

The lawsuit alleges that when HBO Max bid on the South Park streaming rights, it did so with the assurance that there would be three new seasons of 10 episodes each. The suit alleges, however, that only two episodes were delivered for the first of those seasons and only six for the second. HBO Max understands that the third season will also consist of of six episodes — for a total of 14 across the three seasons.

The suit alleges that new episodes are far more valuable than old ones, and that therefore HBO Max dramatically overpaid for the library.

Meanwhile, in 2021, MTV — a Paramount subsidiary — announced a $900 million deal with Parker and Stone for exclusive South Park content that would run on Paramount+. In the press release, an MTV executive was quoted as saying that the deal would “help fuel Paramount+.”

The suit also quotes Stone as saying, “We have f*ck you money now” in reference to the deal.

HBO Max argues that the deal required diverting content that should have fallen under its 2019 contract to Paramount+ instead. The suit alleges that Paramount engaged in “verbal trickery” and “grammatical sleight-of-hand,” characterizing the new content as “movies,” “films” or “events” — but not “episodes” — to avoid its obligations under the 2019 agreement.

Under the MTV deal, Paramount+ would get 14 “made for streaming” movies. Four of those “movies” have already run on Paramount+: South Park: Post Covid, South Park: Post Covid: The Return of Covid, South Park The Streaming Wars Part 1, and South Park The Streaming Wars Part 2.

In response, Paramount denied the allegations. The company also accused Warner Bros. Discovery of failing to pay the license fees that it owes under the agreement.

“We believe these claims are without merit and look forward to demonstrating so through the legal process,” a Paramount Global spokesperson said. “We also note that Paramount continues to adhere to the parties’ contract by delivering new South Park episodes to HBO Max, despite the fact that Warner Bros. Discovery has failed and refused to pay license fees that it owes to Paramount for episodes that have already been delivered, and which HBO Max continues to stream.”

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