Warner Bros. Discovery Sues Paramount For An “Illicit Conspiracy” To Circumvent $500M ‘South Park’ Deal

Warner Bros. Discovery is suing Paramount Global for allegedly reneging on part of their $500 million licensing deal which included streaming rights to catalog and new episodes of South Park. In the suit, WBD accuses Paramount, South Park Digital Studios, and MTV Entertainment of colluding to find a way around that agreement.

What were the details of that original deal? In 2019, Paramount and HBO Max signed an eye-watering $500 million deal for exclusive streaming rights to a massive batch of South Park content ahead of the latter platform’s launch in May 2020. The multi-year licensing deal included all 23 existing seasons of South Park plus the following three new seasons, which Warner Bros. says were supposed to include 10 episodes each.

Why is WBD suing? According to the suite (download PDF), when Paramount later launched its Paramount+ platform, the company “embarked on a multi-year scheme to unfairly take advantage of Warner/HBO by breaching its contract and stealing its content. That scheme, which was blatantly intended to prop up Paramount+ at the expense of Warner/HBO, is the subject of this lawsuit.”

What’s happened since the original 2019 deal? HBO Max says that delivery of season 24 was delayed by the pandemic and that after the delay, only two episodes were delivered for season 24, six episodes for season 25, and six episodes for season 26. The 14-episode total is less than half of what HBO Max had expected to get under the deal. Warners Bros. says that new episodes are more valuable than catalog content, and therefore it massively overpaid for what it eventually got.

An “illicit conspiracy”: Warner Bros. Discovery is accusing Paramount, South Park Digital Studios (SPDS), and MTV Entertainment of colluding to find a way around the 2019 HBO Max deal. WBD says that the companies used “verbal trickery designed to circumvent the terms of the 2019 agreement. To accomplish this, Defendants used grammatical sleight-of-hand, characterizing new content as ‘movies,’ ‘films,’ or ‘events’ to side-step 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 reportedly worth more than $900 million. As part of that deal, 14 new made-for-streaming South Park “movies” were set to premiere exclusively on Paramount+ over the next seven years. Warner argues that deal was in conflict with its own, since SPDS was obliged to offer Warner those specials under the terms of the 2019 contract. Further, Warner claims that SPDS was producing the South Park “movies” while simultaneously claiming it could not deliver episodes of season 24 because of the Covid pandemic. Since then, four South Park movies have appeared on Paramount+: South Park: Post Covid, South Park: Post Covid: The Return of Covid, and the ironically named South Park The Streaming Wars Part 1 and South Park The Streaming Wars Part 2.

What’s Paramount saying? Paramount denies the allegations. The company has also accused WBD of refusing to pay the license fee included in the 2019 contract. A Paramount spokesperson said in a statement:

We believe these claims are without merit and look forward to demonstrating so through the legal process. 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.