Paramount fires back at WBD over ‘South Park’ rights dispute with $52m countersuit

South Park

The legal dispute between Paramount Global and Warner Bros. Discovery (WBD) over South Park streaming rights has taken a new turn, with Paramount launching a $52m-plus countersuit.

WBD has been seeking damages of around $200m against Paramount after filing a lawsuit in New York State Supreme Court in February claiming that it had breached contract by airing episodes of the Trey Parker and Matt Stone-created adult animation when exclusive rights had been sold to HBO Max.

Paramount Global has now returned fire, filing its own countersuit in New York through which “South Park [Digital] Studios (which produces the show) seeks to recover all of the unpaid license fees, totaling more than $52m to date, based upon WarnerMedia’s blatant breaches of the Term Sheet.”

The counterclaim document states that “WarnerMedia has given clear indications that it will not pay any of the remaining $225m+ in license fees still owed for the rest of the five-year term of the Term Sheet.”

It continues: “Paramount Global certainly has not agreed that WarnerMedia can continue to disregard its contractual obligations in this manner” and states that South Park Studios “is entitled to a declaratory judgment confirming the parties’ rights and obligations under the Term Sheet.”

The dispute came about after WBD paid more than $500m in 2019 for the rights to air existing and new episodes of South Park on its streaming service through to 2025.

Episodes of South Park air first on Paramount-owned Comedy Central, while WarnerMedia forged a deal to pay almost $1.7m per episode for streaming rights, prior to its merger with Discovery. Its SVOD HBO Max had been due to receive the first episodes of a new season of South Park in 2020, but WBD was informed that the pandemic had halted production on the show.

However, according to WBD’s February lawsuit, South Park Digital Studios offered two pandemic-themed special episodes to Paramount, which were then aired in September 2020 and March 2021.

That original lawsuit claims that these specials should have been offered to WBD under the 2019 contract and instead used “verbal trickery” to categorise them as movies rather than episodes so they could launch on Paramount+ instead of HBO Max. WBD said that as a result it has incurred damages “in excess of” $200m.

At the time, Paramount said that the claims are “without merit” and that the company looks forward “to demonstrating so through the legal process” – with this new countersuit evidently forming part of that defense.