aTypical Joe: a gay New Yorker living in the rural South

Monday, August 27, 2007

South Park: Matt & Trey get sweet new ad deal

I hope they come up with something good:

Because of the slow entry into the digital realm of Viacom, Comedy Central’s parent, and an almost crippling deal point in Mr. Stone’s and Mr. Parker’s contract, the lewd, rude, crudely animated and mordantly funny series - one that began with a viral video before the term even existed - has barely had a presence as an avalanche of user-generated entertainment hit the Web. Meanwhile, sites like YouTube met the demand for free “South Park” clips without paying for the privilege.

Now, however, Mr. Stone and Mr. Parker and their bosses at Comedy Central, a unit of Viacom’s MTV Networks, are attempting to leapfrog to the vanguard of Hollywood’s transition into Web. In a joint venture that involves millions in up-front cash and a 50-50 split of ad revenues, the network and the two creative partners have agreed to create a hub to spread “South Park"-related material across the Net, mobile platforms, and video games.

The deal, signed Friday, begins with a three-year extension of the show and its creators’ contracts through a 15th season, in the year 2011, and gives Mr. Stone and Mr. Parker sizable raises, both in their salaries and in their guaranteed advances against back-end profits from DVDs, merchandising, syndication and international sales.

It also creates an entity called SouthParkStudios.com, to be housed in the show’s animation studio in Culver City, Calif., that is intended to be an incubator not only for new applications for characters the likes of Cartman, Kyle, Stan and Kenny, but for new comedy concepts that could one day mature into TV series of their own.

But the real headline is that they get a 50-50 share of the digital ad revenue:

[E]ven Mr. Parker and Mr. Stone would most likely not have been able to negotiate their new joint venture had they not years ago inserted into their contract what has proved to be a killer deal point. Comedy Central’s boilerplate reserved to the network any income generated by the show through other network divisions. But the pair’s lawyer, Kevin Morris, insisted that any “South Park” revenue not derived specifically from broadcast on the cable channel would go into the pot for calculating the men’s share of back-end profits.

This was meaningless at first, but it has taken on huge significance of late, Mr. Morris said. As Viacom struggled to change into a digitally nimble media company - making a failed bid for MySpace in 2005, suing Google and YouTube this year, and striking a retaliatory deal with Joost - the exploitation of “South Park” was subject to this nettlesome requirement. It was thus no coincidence that “South Park” was not part of the Joost deal.

Both the show’s creators and the network, therefore, stood to gain if it became easier to sell the show digitally. The brainstorming that led to Friday’s deal began a year ago in Mr. Morris’s office when Mr. Herzog proposed creating a digital animation studio led by Mr. Stone and Mr. Parker along the lines of a similar one at Nickelodeon.

Last year when it was reported that Tom Cruise got Comedy Central to cancel the Scientology episode by saying that he’d refuse to promote Mission Impossible 3, I wanted South Park to kiss-off Viacom:

My advice to Matt and Trey? Announce they’re leaving Comedy Central unless they get, say, the same kind of total control that huge Hollywood directors and stars like Cruise get over the content and distribution of their movies.

Good for them!