A legal battle has erupted between Comcast’s Sky and Warner Bros. Discovery, with the European media giant suing over breach of a 2019 contract for exclusive rights to its programming.
In a lawsuit filed in New York federal court on Friday, Sky said Warners is obligated to offer the opportunity to partner on at least four shows a year, including the upcoming Harry Potter series, but for most of the year. “We were nowhere near that standard.” Entire contract period.
Instead, Warner “nearly ignored the parties’ agreements and sought to keep Harry Potter content exclusive to itself so it could be used as the basis for the launch of its Max Streaming Service in Europe.” the complaint states. Sky is seeking a court order forcing David Zaslav’s company to act as co-producer.
A Warners spokesperson said in a statement that the licensing agreement at issue “expires at the end of 2025” and that the lawsuit “provides no basis for Sky and Comcast to gain leverage in negotiations for programming beyond that date.” “It’s not an attempt,” he said. “We know that HBO-branded programming is important to Sky, as evidenced by our desire to find a way to renew our contract for over a year, and this lawsuit “Sky has made clear that it is deeply concerned about the viability of its business,” it added. Award-winning content will be lost. ”
Sky said in a statement that it had launched legal action to “protect our interests and enforce our rights to partner in the production and distribution of our highly valuable content.”
Amid industry turmoil, Warners has weathered the plummeting value of its cable TV business by shifting its focus to streaming. In August, the company took a $9 billion writedown on its linear cable channels in a move motivated in part by the loss of NBA rights. Flashy series like “Harry Potter,” “Game of Thrones” and “The Last of Us” are the cornerstone of the company’s streaming ambitions.
According to the complaint, Warners agreed in 2019 to offer Sky the opportunity to co-produce at least four original series a year from 2021 to 2025. The offer must be presented immediately after Max orders the first season and must include all information related to the film. series, the complaint states. The deal requires Sky to select at least two players and has “full discretion” to choose from among the proposed candidates.
However, Warners “in no way supported the termination of the transaction between the parties,” the complaint alleges. Despite claiming earlier in the deal that it had dozens of series in development, the company said it was “unable to deliver the required minimum of four eligible series to Sky in each calendar year from 2021 to 2023. There is no doubt that.” The company is said to have withheld key production information about the series it presented to Sky.
The controversy reached a boiling point in 2023 when Warner issued a press release announcing that Max had officially greenlit the new Harry Potter series, scheduled for release in 2026. Sky insists the show meets all the required standards. What’s on offer: Each episode is one hour long, with plans for multiple seasons, produced by Warner Bros. Television and premiering on Max.
Asked about the opportunity to co-finance the series, Warner said in a May 2023 email, “Due to actual production conditions, it is not possible for HBO Max to deliver four series to Sky in one year. , it is “impossible” to meet certain provisions of the contract.” ”
According to the complaint, the deal provides for a 20-year transfer to Sky of all media rights in the territory covered by the agreement, which includes the United Kingdom and several European countries. You are entitled to retain all proceeds from the exploitation of these rights. Sky claims Warner intends to have “exclusive ownership of the lucrative qualifying series it has ordered to improve the performance of its Max Streaming Service” in favorable territories where both companies compete. .
The lawsuit details the terms of the contract extensively. Sky will be required to fund at least five seasons, “each allocated at a fixed proportion between 20% and 25%” of the series’ budget for the first season. In exchange, they get the exclusive option of continuing to co-produce each season with the rare so-called “series survival rights.”
The deal also contemplates creative collaboration on the show. The suit says Warners must “meeting meaningfully with Sky” regarding key creative aspects such as the script, writers, executive producers, cast and editing.
In its complaint, Sky makes three claims related to breach of contract.
