| Trey Parker and Matt Stone never planned to play a part in the Paramount soap opera. The creators of South Park reached out to Paramount months ago to extend their deal, committing to 10 more years — and dozens of additional episodes — of one of the most popular TV series of all time. It seemed like a no-brainer to them. Who wouldn’t want more South Park? But the negotiations grew contentious. David Ellison, the incoming owner of Paramount, didn’t want to extend the South Park deal until he was in control. Nor did he agree on strategy with company co-CEO Chris McCarthy and his deputy Keyes Hill-Edgar, who were hoping to use the moment to resolve a lawsuit with Warner Bros. Discovery Inc. The deep pockets of Netflix Inc. loomed over it all. The dispute delayed the show’s new season, including an episode that’s been hailed as one of the great pieces of satire in recent memory, and temporarily knocked South Park off streaming overseas. It also told us a lot about how Ellison plans to run Paramount differently from his predecessors. McCarthy has slashed costs across his fiefdom at Paramount, but spent whatever it took to satisfy the talent he deemed most important — namely Taylor Sheridan, the creators of South Park and Jon Stewart. Ellison, buoyed by deputy Jeff Shell and his finance team, felt McCarthy was spending too much money. From $0 to $150 millionExecutives at Paramount started preparing for a South Park negotiation last year. Warner Bros.’ HBO Max was paying more than $100 million a year for US streaming rights that were set to expire in June 2025. Paramount executives had come to regret selling streaming rights to HBO Max because it deprived their own service, Paramount+, of a homegrown hit. To get around that, Paramount+ commissioned “specials” from Parker and Stone, leading Warner Bros. to sue. McCarthy and Hill-Edgar aimed to put South Park on Paramount+ and settle the suit by licensing South Park to two streaming services. HBO Max was offering about the same license fee (around $100 million a year) as it did under the most recent deal for a share of the rights. Parker and Stone have more control over streaming rights than just about any creators today. Thanks to a deal signed nearly two decades ago, they operate the streaming business of South Park in a joint venture with Paramount. They get half of the money and the right to approve certain deals. Parker and Stone liked the idea of maximizing exposure for the show. Their lawyer Kevin Morris and the head of their company, Keith Pizzi, also saw a chance to execute two huge deals at once — an overall deal for Parker and Stone and a streaming agreement — ensuring their future well into their 60s. HBO Max offered to license South Park for 10 years, ending at the same time as the overall deal for Parker and Stone. HBO Max increased its offer to $105 million a year and asked for about $50 million from Paramount to settle the lawsuit. But that only worked if there was a steady flow of new episodes. The number was large enough that Skydance had the right to approve the next deal, per a clause in its merger agreement with Paramount. The definition of that right became a subject of much debate. Ellison rejected the deals. Skydance didn’t want to strike such a long-term licensing deal for the show, worried about how the media business would change. The Skydance team called the HBO team and asked if they would make an offer for five years. They also urged Paramount to test the market and see what South Park was worth. Netflix offered $250 million a year for worldwide rights on a shorter deal. Skydance also had no interest in extending the overall deal with Parker and Stone this far out. Paramount was paying Parker and Stone $150 million a year under the overall deal they signed in 2019. That included their share of the streaming and fees for making new episodes of the show. The impasse on the overall deal complicated the streaming negotiations. HBO wasn’t going to pay as much for the streaming rights if there was no guarantee of new episodes for the run of the contract. Parker and Stone came to believe that Skydance was meddling to artificially suppress the value of their show. They saw the Netflix offers as the floor — not the ceiling. It was around this point that news of the tension leaked in the press. The South Park team hired lawyers who sent letters to Skydance, which initially dismissed the claims. Taking on TrumpThe South Park team tried to create some urgency to get a deal done. They had announced plans to release new episodes of the show in July. They missed the deadline, forcing the Comedy Central network to delay new episodes until July 23. They also requested that Paramount+ take South Park down overseas. Netflix had raised its offer to $275 million a year by the time Ellison met with Netflix co-CEO Ted Sarandos at a Sun Valley investment conference. But it was evident to Sarandos that Ellison wanted to keep the rights for himself. The biggest hurdle to that was Paramount’s deal with Parker and Stone. Skydance had altered its approach, making made a preliminary offer for the overall deal of $150 million a year. That wasn’t a raise, even though the streaming money was going up. During the week of July 14, lawyers for Parker and Stone drafted a letter threatening legal action against Skydance. Ellison, along with Shell and agent Ari Emanuel, called Stone and Morris to resolve the dispute. Skydance offered to pay Parker and Stone $200 million a year. The parties spent last weekend in negotiations. Parker and Stone wanted to put the show on HBO Max and Paramount+. Warner Bros. increased its offer again by a few million dollars a year, while Parker and Stone offered to reduce their payday by more than $60 million to help bridge the gap. It wasn’t enough. In the end, Ellison signed off on a deal for Paramount+ to take the exclusive streaming rights for $300 million a year. Ellison also upped his offer on the overall deal to $250 million a year. The two creators, already rich beyond their wildest dreams, would be paid $1.25 billion for the next five years. Days after resolving his dispute with Parker and Stone, Ellison finally closed his deal for Paramount. But not before Parker and Stone had one more surprise. The new season of South Park debuted Wednesday, mocking Trump and Paramount. Parker and Stone shared the episode in advance with the three CEOs of Paramount, who then notified Ellison and Paramount Chair Shari Redstone that the episode would antagonize the president. Trump tried to downplay the episode, saying the show hasn’t been relevant in more than 20 years. Just days earlier, Nielsen released a report indicating that South Park had been one of the 20 most popular acquired titles in the first half of the year. While showing an episode to the CEO in advance is unusual for South Park, Redstone and Ellison voiced no objections. The creators are hoping they can now get back to what they do best: making people laugh without any interference. The best of Screentime (and other stuff) | Get ready for more ads on Netflix and Amazon | For all the doom and gloom about the media business, global media and entertainment revenue will increase by an average of about 4% a year over the next five years, according to PricewaterhouseCoopers. The pace of growth has slowed, but there is growth, nonetheless. Consumers aren’t spending much more on entertainment. But they are spending with their eyes and clicks. Advertising sales from video games and streaming video will continue to grow, while advertising in retail search — looking for products on Amazon for example — is stealing share from traditional search like Google. So, get ready for more ads in your Netflix and Amazon. The global streaming video market is projected to eclipse the global pay-TV business in the next couple years. The telco warsShares of Charter Communications tumbled last week after the pay-TV provider reported a steeper-than-expected drop in internet customers. With millions of consumers canceling their TV subscriptions, cable providers like Comcast and Charter have prioritized selling internet service in recent years. But they are suffering there now, too. Charter has lost internet customers for seven straight quarters. Who is to blame? Phone companies, in part. T-Mobile, AT&T and Verizon are all competing for at-home internet customers. The No. 1 movie in the world is…The Fantastic Four: First Steps. The reboot of the comic-book franchise grossed about $220 million worldwide and has benefited from positive reviews. It is the last blockbuster of summer. It is not the top movie in Japan, where a local film from the hit anime series Demon Slayer is breaking records. The most-watched movie in the world this weekend is Happy Gilmore 2, which is the top movie on Netflix in more than 60 countries. Netflix’s podcast strategyNetflix co-CEO Ted Sarandos tickled the podcast industry in April when he said the streaming service is looking to do more with video podcasts. In recent months, my colleague Ashley Carman and I have heard Netflix was looking to hire a head of podcast content and an executive to work across “creator” content. Top executives at Netflix said this wasn’t true. Many of the company’s top comedians are famous because of podcasts, as Ashley explained in her latest newsletter, and Sarandos reiterated Netflix’s interest in “a wide variety of creators and video podcasters” earlier this month. But despite a report in Business Insider this week that Netflix is looking for a podcast programming executive, Netflix still says that isn’t the case. But that hasn’t stopped agents from suggesting the company hire people to buy their clients’ shows. Deals, deals, dealsI finally started watching The Pitt. Very addicting. | 
