Warner Bros. Discovery is suing Paramount over streaming rights to “South Park.”
Stan Marsh, Kyle Broflovski, Eric Cartman and Kenny McCormick attend the Paley Center for Media a special retrospective event honoring 20 seasons of ‘South Park’ at the Paley Center for Media on September 1, 2016 in Beverly Hills, California.,
Tibrina Hobson | Getty Images
Warner Bros. Discovery sued Paramount Global to enforce South Park’s streaming rights and set the stage for a legal battle between two media giants as the streaming wars intensify.
On Friday, Warner Bros. Discovery filed a lawsuit against Paramount, South Park Digital Studios and MTV Entertainment, seeking hundreds of millions of dollars for alleged breach of contract.
Warner said it agreed in 2019 to pay more than $500 million, or about $1.69 million per episode, to license “South Park,” the long-running cartoon of bad-talking elementary school kids that aired on cable television network Comedy Central has been broadcast by Paramount for decades for its own streaming platform HBO Max.
During the bidding process for the “South Park” rights, the filing says, Paramount allegedly asked if Warner Bros. Discovery would consider sharing the rights to the show for Paramount’s own streaming service.
“Warner/HBO denied the proposal as a ‘non-starter,'” the lawsuit reads.
However, Warner alleged in its lawsuit that Paramount backed out of its contract and withheld “South Park” specials and other related content. The lawsuit points to Paramount’s own, still young streaming service Paramount+ as the reason.
A Paramount spokesman dismissed Warner’s claims in Friday’s lawsuit, adding that Warner had stopped paying royalties.
“We believe these allegations are unfounded and look forward to proving this through the trial,” a Paramount spokesman said in a statement. “We also note that Paramount continues to honor the parties’ contract by supplying new South Park episodes to HBO Max, despite Warner Bros. Discovery’s failure and refusal to pay royalties it paid Paramount for previously released ones Episodes owed have shipped and HBO Max continues to stream.”
Although the agreement called for HBO Max to receive the first episodes of the latest season of South Park in 2020, Paramount said it informed Warner in March that it was halting production on the season due to the pandemic
Warner then claims that “South Park” and its creators pushed production of other types of content, such as B. Two pandemic-themed specials that aired between September 2020 and March 2021.
Warner further claims that the program was in the works when Paramount’s subsidiary MTV signed a deal with the creators of “South Park” in 2021 that would see exclusive content for Paramount+ reportedly worth $900 million.
“We believe that Paramount and South Park Digital Studios have embarked on a multi-year program of unfair trade practices and deception in flagrant and repeated violations of our contract, which gave HBO Max clear exclusive streaming rights to the existing library and new content of the popular animated film conceded comedy South Park,” a spokesman for Warner Bros. Discovery said in a statement Friday.
The showdown comes as streaming services competed for subscribers and looked to reach profitability in the near future. Media companies have spent billions of dollars on content to attract customers and have recently begun to cut costs as increased competition has resulted in slower subscriber growth.
This week, Warner Bros. Discovery reported a big loss on its quarterly earnings as the company faces a slowing advertising market that has weighed on its revenue. However, the company said it added 1.1 million global streaming subscribers, bringing its total to 96.1 million for services like HBO Max and Discovery+. Losses for the streaming business also narrowed to $217 million for the period, “a $511 million improvement from a year earlier.”
Warner Bros. Discovery plans to launch a combined HBO Max and Discovery+ streaming service this spring.
Meanwhile, Paramount said last week Paramount+ reached 56 million subscribers in the most recent quarter. The company plans to increase the price of its streaming service when it combines Paramount+ and Showtime later this year. Paramount also said it was impacted by the difficult ad market.