A legal brawl has broken out between Comcast’s Sky and Warner Bros. Discovery, with the European media giant suing over breaches to a 2019 deal for exclusive rights to shows.
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Sky, in a lawsuit filed on Friday in New York federal court, says Warners is obligated to offer the opportunity to partner on at least four shows per year, including the upcoming Harry Potter series, but “fell far short of that mark” for nearly the entire duration of the contract.
Instead, Warners has “largely disregarded the parties’ agreement and sought to keep the Harry Potter content for itself so that” it can be used as the “cornerstone of the launch of its Max streaming service in Europe,” the complaint states. Sky seeks a court order that would force the David Zaslav-led company to bring it on as a co-producer on the production.
In a statement, a spokesperson for Warners said the disputed licensing agreements “expire at the end of 2025” and that the lawsuit is a “baseless attempt by Sky and Comcast to try and gain leverage in its negotiations for our programming beyond that date.” It added, “We know HBO branded shows are critical to Sky, as evidenced by their desire for over a year to find a way to renew our agreements, and this lawsuit makes it clear that Sky is deeply concerned about the viability of its business were it to lose our award-winning content.”
Sky said in a statement that it initiated legal action to “safeguard our interests and enforce our rights to partner in the production and distribution of highly valuable content.”
Amid industry turbulence, Warners has been navigating the plummeting value of its cable TV business as it shifts it focus to streaming. In August, it took a $9 billion impairment on its linear cable channels in a move motivated in part by the loss of NBA rights. Splashy franchises, like Harry Potter, Games of Thrones and The Last of Us , have become bedrocks of its streaming ambitions.
According to the complaint, Warners agreed in 2019 to offer Sky the opportunity to co-produce at least four original series per year from 2021 to 2025. The offer must be presented immediately after Max orders a first season and must include all information related to the series, the lawsuit says. Under the deal, Sky is required to select a minimum of two and has “complete discretion” to pick from the proposed slate.
But Warners has “never upheld its end of the parties’ bargain,” the lawsuit alleges. Despite claiming it had dozens of series in development during the early years of the contract, it “undisputedly failed to offer Sky the required minimum four qualifying series during each calendar year from 2021 through 2023.” For the series the company did present to Sky, it allegedly withheld critical information about the productions.
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The dispute reached a boiling in 2023 when Warners issued a press release announcing that Max had officially greenlit a new Harry Potter series, which is expected to debut in 2026. Sky alleges that the show meets all of the criteria for a show that it must be offered: one hour in length per episode, plans for multiple seasons and produced by Warner Bros. Television for premiere on Max.
When asked about the opportunity to co-fund the series, Warners stated in a May 2023 email that it’s “impossible” to meet certain provisions of their agreement since “actual circumstances of production preclude HBO Max from ever presenting Sky with four series in one year.”
The contract provides Sky the assignment of all media rights in the areas covered by the agreement, which includes the U.K. and multiple countries in Europe, for 20 years, the lawsuit says. It’s entitled to retain all revenue from the exploitation of these rights. Sky alleges that Warner intends to “keep solely for itself any potentially lucrative qualifying series that it does order in an effort to boost the performance of its own Max streaming service” in lucrative territories where the two sides are competitors.
The lawsuit extensively details the terms of the contract. Sky is required to provide financing for at least five seasons, “each at a fixed percentage allocation between 20% and 25%” of the series’ budgets for the first season. In exchange, it gets an exclusive option, with a prized so-called “life-of-series right,” to continue co-producing the productions for every season.
The agreement also contemplates creative collaboration on the shows. Warners is required to “meaningfully consult with Sky” regarding key creative aspects, including scripts, writers, executive producers, cast and editing, the lawsuit claims.
In the complaint, Sky advances three claims related to breach of contract.
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