As Paramount’s profitable licensing deal for South Park expires, permitting the present to be shopped, a brand new authorized battle is brewing.
Jeff Shell, the RedBird Capital government who would be the incoming president of latest Paramount if the merger with Skydance is accomplished, has been accused by an legal professional for South Park creators Trey Parker and Matt Stone of interfering in contract negotiations with potential suitors.
In a June 21 letter obtained by The Hollywood Reporter, Park County, the leisure firm run by Parker and Stone, threatened authorized motion for steering Netflix and Warner Bros. Discovery to switch sure phrases of their presents in a “method calculated to profit Paramount on the expense” of the corporate. It pointed to Shell urging WBD to present Paramount+ an unique 12-month window for brand new episodes of the present and to shorten the time period of the deal from 10 to 5 years, which may worsen the studio’s bid for the sequence.
“We hereby demand that you just, Redbird, and Skydance instantly stop your interference,” the letter states. “If these actions proceed, we could have no selection however to behave to each defend our rights and discharge any obligations we could need to the general public.”
In an announcement, a spokesperson for the David Ellison-led agency mentioned, “Below the phrases of the transaction settlement, Skydance has the suitable to approve materials contracts.”
On the coronary heart of the dispute: a three way partnership Parker and Stone function with Paramount known as South Park Digital Studios, which owns the streaming rights to the hit animated sequence. There are two years remaining on Paramount’s $900 million general deal, with the corporate in talks to increase the settlement and convey the present to Paramount+.
The possession construction, which lends itself to conflicts of curiosity, complicates licensing negotiations for the present. Additionally at play is pending approval for Skydance’s deal to accumulate Paramount. Below federal antitrust legal guidelines, the David Ellison-led agency is barred from taking management and issuing directives till the merger’s official closure.
“You probably did this behind Park County’s again,” writes Afshin Beyzaee, common counsel for the agency, to Shell. “That self-dealing would have been completely restricted if it had been completed by Paramount itself. So, it’s merely outrageous that even earlier than it has been granted the authority to shut the merger with Paramount, Redbird and Skydance are leaping the gun and utilizing confidential data of SPDS to purport to make calls for on behalf of SPDS that even Paramount has no proper to make.”
South Park Digital Studios is ruled by a five-member board of managers, which incorporates Paramount affiliate Comedy Companions, although it has restricted rights to behave on behalf of the three way partnership. In opposition to this backdrop, Park County says that Shell “had no proper or authority to be demanding that SPDS’s potential counterparties make modifications to their proposals, particularly modifications that will depress the worth of their proposals.”
The deal might be traced again to 2007, when Stone and Parker reduce a profitable new settlement with Comedy Central proprietor Viacom.
Streaming video existed again then, however the market was vastly completely different: Netflix started streaming movies in January of that yr, and Viacom was suing YouTube over copyright infringement. When it got here to how shoppers watched episodes exterior of linear TV, DVDs had been the dominant financial drive.
The deal struck by Park County and Viacom gave Stone and Parker’s firm 50 % of digital income in perpetuity, cut up with the corporate. As streaming video proliferated and have become a trillion-dollar enterprise, the worth of that deal has solely multiplied.
HBO Max’s 2019 deal for South Park reruns, for instance, was value $550 million, with half going on to Park County. With South Park‘s large library of greater than 300 episodes, and extra being launched yearly, future offers will maintain the money flowing for years to come back, regardless of what looks like efforts to attempt to get the genie again within the bottle.
June 23, 12:24 p.m. Up to date to incorporate Skydance assertion.