Feb 27, 2023

Warner Bros. Discovery Sues Paramount for "Unfair Conspiracy" to Avoid $500 Million South Park Deal

Warner Bros. Discovery has sued Paramount Global for breaking part of a $500 million licensing agreement that includes streaming rights to the "South Park" catalog and new episodes. In the suit, WBD accuses Paramount, South Park Digital Studios, and MTV Entertainment of colluding to find a way around that agreement. [In 2019, Paramount and HBO Max signed an unprecedented $500 million deal for exclusive streaming rights to South Park's vast content prior to the latter's platform launch in May 2020. The multi-year licensing deal included all 23 existing seasons of "South Park," plus the following three new seasons, which according to Warner Bros. would have included 10 episodes each.

According to Why WBD Sues - Suite (PDF download), when Paramount later launched its Paramount+ platform, the company "broke the Warner/HBO contract and stole its content in a multi-year embarked on a plan. This plan was explicitly intended to support Paramount+ at the expense of Warner/HBO and is the subject of this lawsuit.

What happened after the original 2019 contract - According to HBO Max, the delivery of Season 24 was delayed due to the pandemic, and after the delay, only 2 episodes were delivered for Season 24, 6 episodes for Season 25, and 6 episodes for Season 26. The total of 14 episodes is less than half of the episodes HBO Max had expected to get from the deal. Warners Bros. states that it was a significant overpayment for what it ultimately got because the new episodes are worth more than the catalog content.

"Rogue Conspiracy": Warner Bros. Discovery accuses Paramount, South Park Digital Studios (SPDS), and MTV Entertainment of colluding to find a way around the 2019 HBO Max contract, according to WBD, the two companies "engaged in a verbal ploy to circumvent the terms of the 2019 contract. To accomplish this, Defendants used grammatical sleight of hand, describing the new content as a "movie," "film," or "event" to avoid SPDS's contractual obligations to HBO Max."

Overlapping Contracts: In 2021, Paramount's MTV announced a deal with South Park creators Trey Parker and Matt Stone. As part of the deal, 14 new South Park "movies" will air exclusively on Paramount+ over the next seven years. Warner argues that this agreement is inconsistent with its own contract because SPDS was obligated to provide these special programs to Warner under the terms of the 2019 contract. Warner further claims that at the same time SPDS was producing the South Park "movie," it was also claiming that it could not deliver the Season 24 episodes due to the Cobid pandemic. Since then, four South Park movies have appeared on Paramount+: "Post Covid," "South Park South Park: Post Covid," "South Park: The Return of Covid," and the ironically named "South Park The Streaming Wars Part 1" and "South Park The Streaming Wars Part 2".

Paramount's Saying - Paramount denies the allegations. The company also accuses WBD of refusing to pay the licensing fees included in the 2019 agreement. A Paramount spokesperson said in a statement:

We believe these claims are without merit and look forward to proving them through legal proceedings. In addition, despite Warner Bros. Discovery's failure and refusal to pay the licensing fees owed to Paramount for episodes that have already been distributed and continue to be distributed by HBO Max, Paramount is distributing new episodes of South Park to HBO Max We also note that the parties continue to comply with their agreement by.