Paramount's ‘South Park' streaming deal is in limbo as Skydance merger drags on
Media giant Paramount Global is trying to avoid a streaming future without Cartman, Stan, Kyle and Kenny.
As Paramount struggles to complete a key merger, the company is in the midst of a protracted negotiation to extend one of its biggest and most important franchises: the long-running foulmouthed cartoon 'South Park.'
Paramount's $900-million overall deal with 'South Park' creators Matt Stone and Trey Parker doesn't expire for another two years. New episodes run first on Paramount's basic cable network Comedy Central.
But efforts to renew that venture and bring the show to the Paramount+ streaming service have hit a major snag, according to three people familiar with the discussions who were not authorized to speak publicly.
The situation highlights deep tensions and disagreements as a trio of executives try to manage Paramount until the company's sale to David Ellison's Skydance Media, which has the right to approve or deny large deals such as the 'South Park' pact under covenants made with Paramount.
Paramount leaders are desperate to lock down 'South Park's' streaming rights in the U.S. and abroad. They've long been frustrated by a licensing arrangement made six years ago by the previous regime that sent 'South Park' to rival HBO Max, owned by Warner Bros. Discovery. That deal expires this month.
'South Park' is one of Paramount's most important shows. Along with 'The Daily Show With Jon Stewart,' the four boys and their celebrity-skewering ways put Comedy Central on the map for basic cable viewers, taking on hot-button issues from Scientology and the War on Terror to the royal family and the Trump administration.
During a May earnings call, Paramount co-Chief Executive Chris McCarthy — who runs Paramount's media networks as well as Showtime and MTV Entertainment Studios — told investors that 'South Park' episodes would begin streaming on Paramount+ in July.
However, Paramount hasn't nailed down the streaming rights to 'South Park,' according to the three people familiar with the conversations. Since earlier this year, Paramount has made at least one offer to Parker and Stone as an early extension of their overall deal.
The company also wants to secure rights to stream the 333 episodes of 'South Park' on Paramount+.
Some of the knowledgeable people expect 'South Park' distribution fees to be valued at more than $200 million a year.
But Skydance hasn't signed off, believing the deals to be too rich, according to the sources. Paramount executives believe the show is worth the big bucks, given the show's enduring popularity and legacy.
Representatives for Paramount and Skydance declined to comment.
Hollywood agent Ari Emanuel, whose firm WME represents Parker and Stone, defended Paramount and Skydance's handling of the situation on Friday by phone.
'Nobody has rejected anything. They are just doing their analysis,' Emanuel told The Times in a brief interview. 'We've got offers from other distributors. Everybody wants this show.'
Skydance's $8-billion takeover of Paramount has been in a holding pattern for months as the two companies wait for federal regulators' approval. Skydance, backed by tech mogul Larry Ellison and RedBird Capital Partners, is eager to take over the storied media company.
They intend to bring increased financial rigor to Paramount's operations, other sources have said. Paramount and Skydance have told Wall Street the deal will bring $2 billion in cost savings, with half of that coming in the first year.
Deadlines are looming. The new season, the program's 27th, is scheduled to debut July 9 on Comedy Central.
Unless Paramount strikes a deal with the creators by June 23, the company risks losing the franchise's streaming rights because Parker and Stone could shop the show to other interested streamers, such as Netflix, Amazon Prime Video or Hulu. However, sources cautioned that negotiations could go past the June deadline and that the parties expect a deal to get done.
Represented by their longtime attorney Kevin Morris, who is leading the current negotiations, the duo carved out the internet rights nearly two decades ago. They formed a joint venture with Paramount (then known as Viacom) called South Park Digital Studios. That decision proved highly lucrative for Parker and Stone, also known for the hit Broadway musical 'The Book of Mormon.'
Paramount runs the joint venture with Stone and Parker, sharing control of the streaming rights to the show that launched in 1997 on Comedy Central, although the duo can veto streaming deals they find unfavorable.
Companies are typically not supposed to wade too deeply into another firm's affairs. Federal antitrust laws prohibit so-called gun-jumping, when an acquiring company begins calling the shots before a deal's official closure. But Paramount agreed to accept Skydance's input on big-ticket expenditures while the two sides wait for the deal to close.
The 'South Park' streaming rights negotiations also have been complicated by a lawsuit brought two years ago by Warner Bros. Discovery. That company accused Paramount of violating terms of its 2019 licensing pact for 'South Park,' after Warner paid about $540 million for the show's streaming rights.
Paramount and the 'South Park' creators developed specials featuring the four animated boys in a fictional Colorado mountain town to stream exclusively on Paramount+. Warner argued the move violated its licensing deal. HBO Max declined to comment.
Two years after the HBO Max deal, Paramount struck a new accord with Parker and Stone for $900 million, sealing their partnership and ensuring new episodes of 'South Park' would be made. That deal runs to 2027, although Paramount executives have offered to extend that arrangement for several years.
Paramount has long intended to shift the show to Paramount+ as soon as the HBO Max deal expires.
The various parties have long envisioned a scenario where domestic and international rights would be shared by at least two different streaming services. Although neither partner would have exclusive rights, the current trend in television is for studios to maximize revenue to help pay for expensive programs, like 'South Park,' while maintaining some streaming rights.
Paramount also has been dealing with another crisis that has been complicated by the Skydance merger. The company has sought to settle President Trump's $20-billion lawsuit claiming subsidiary CBS News deceptively edited a '60 Minutes' interview with then-Vice President Kamala Harris, an allegation CBS denies.
Trump's case hasn't been resolved, and the Federal Communications Commission has been slow to review Skydance's proposed takeover of Paramount, extending the deal review.
The Skydance transaction has been pending at the FCC since last fall, leaving Paramount executives in limbo.
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