Warner Bros. Discovery is suing to enforce its exclusive streaming rights to South Park on HBO Max.
A lawsuit filed on Friday in New York state court accuses Paramount Global of going back on a $500 million licensing deal reached in 2019 with Warners by diverting South Park specials and other related content to its own streaming platform.
WBD, in turn, has refused to pay licensing fees on some episodes that continue to stream on HBO Max, according to a Paramount representative, who denied accusations that the company is violating the terms of its deal with Warners.
SPDS — a joint venture between Paramount and South Park‘s creators, Matt Stone and Trey Parker — held open bids in September 2019 for the exclusive streaming rights to South Park. It allegedly insisted upon a flat-rate, per-episode licensing fee.
Under the deal reached in 2019, Warners paid more than $500 million both the existing library of episodes as well as 30 new episodes for the upcoming three seasons of the series, or roughly $1.69 million per episode. The suit says that sharing the streaming rights to the series was a “non-starter” for the company.
The agreement provided for two types of content: long-form episodes over 20 minutes that first appear on a non-streaming platform and episodes from seasons 24 to 26 that do not fall into the first category.
The suit points to the launch of Paramount+ as the motivation for the company to “embark on a multi-year scheme to unfairly take advantage of Warner/HBO by breaching its contract and stealing content.”
WBD claims that Paramount conspired with SPDS and MTV, a subsidiary of Paramount, to “divert as much of the new South content as possible to Paramount+ in order to boost that nascent streaming platform.”
To further the alleged scheme, MTV in August 2021 reached a $900 million deal with Parker and Stone for new South Park content to premiere exclusively on Paramount+ over the next five years. Under the agreement, 14 South Park movies would release on Paramount+, starting with two films in 2021. The suit says MTV characterized the content as movies opposed to episodes in a “calculated and deliberate attempt” to undermine the 2019 deal with Warners.
“Rather than honor its obligation to Warner/HBO, SPDS, acting in concert with Paramount and MTV, engaged in a campaign of verbal trickery designed to circumvent the terms of the 2019 agreement,” the suit reads. “To accomplish this, Defendants used grammatical sleight-of-hand, characterizing new content as ‘movies,’ ‘films,’ or ‘events’ to side-step SPDS’s contractual obligations.”
Warners takes issue with the release of two South Park “events” called “Pandemic Specials” that premiered exclusively on Paramount+. After initially being told that the installments weren’t part of the 24th season, SPDS reversed position and decided that the specials would constitute two episodes each, according to the complaint. In January 2022, WBD was told that the “events” would count as the entirety of the season and that the 25th season would consist of only six episodes “in direct violation of SPDS’s agreement that each new season under the 2019 agreement would include at least 10 episodes, for a total of 20 new episodes.
The suit alleges the decision was made “in concert with, or at the direction of, Paramount.”
As of February 2023, SPDS has only provided Warners with eight new South Park episodes: the two “Pandemic Specials” and six episodes for the 25th season. Paramount, meanwhile, was given “four supersized South Park episodes of the same format and similar length as the two supersized Pandemic Specials which SPDS had provided to Warner/HBO as the entirety of Season 24. The company is also set to get an additional 10 “supersized” episodes over the next five years.
SPDS and MTV were named in the complaint, which claims breach of contract, deceptive practices and tortious inference, among other claims.
There are more than 300 episodes of South Park, which has aired since 1997 and is in its 26th season. New episodes are consistently among the top performers on HBO Max based on key streaming metrics first views, the first show subscribers watch when they log on, total hours viewed and the percentage of subscribers that have watched the series, according to the complaint.
In a statement, a Paramount representative denied accusations that the company is violating the terms of its agreement with WBD.
“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,” the statement reads.
