Legal trouble related to “South Park” isn’t exactly new. However, when Warner Bros Discovery’s (NASDAQ:WBD) HBO Max took aim at Paramount (NASDAQ:PARA) over “South Park,” it wasn’t at all related to the usually-incendiary commentary featured on the episodes. Rather, it was related to the episodes themselves.
The new legal battle takes aim at South Park’s latest episodes. Warner alleges that Paramount broke a deal that gave HBO Max the rights to stream South Park back in 2019. Then Paramount started releasing new specials and the like on Paramount+. Thus, Paramount was “…blatantly intend(ing) to prop up Paramount+ at the expense of Warner / HBO…” This was about the time that COVID-19 first started kicking in and making streaming services a gold mine of entertainment for people who suddenly weren’t allowed to leave their homes by federal mandate. So any movement on this front had an unusually high impact.
Worse, HBO Max was also in line to get three new seasons of South Park as part of the deal. Each season was to have 10 episodes, which was fairly normal for South Park. However, HBO Max only got two episodes for the first of those three and six for the second. The third season will also only offer six episodes. Thus, Paramount ended up with the movies, which it suggests weren’t part of the agreement at all. Meanwhile, Warner got just the shows, none of the “specials,” and a few episodes shy of what was agreed upon.
Looking at the competing parties in this legal battle shows some clear differences. Warner is basically the better deal at this point; analyst consensus calls it a Moderate Buy, and its stock offers 32.35% upside potential thanks to an average price target of $20.58. Paramount, meanwhile, is a Hold and only offers a sliver of upside potential on its average price target of $22.56.
