Ads add up for 'South Park'

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An animated series is redrawing the lines of television mega-deals.

The eye-popping $75 million pact announced Monday by Comedy Central and the creators of "South Park" may be the most prominent example of the Internet as a bona fide backend window alongside syndication and DVD. The duo of Matt Stone and Trey Parker will get a 50-50 ad split on digital platforms but not on television.

The new extension will bring three more 14-episode seasons -- the same volume Stone and Parker re-signed for in 2005. "Park" is in place now through 2011, bringing its stint at Comedy Central to 15 seasons going back to 1997.

"Three more years of 'South Park' will give us the opportunity to offend that many more people," Stone said. "And since Trey and I are in charge of the digital side of 'South Park,' we can offend people on their cell phones, game consoles and computers too."

Stone and Parker already have negotiated a share of the hundreds of millions of dollars "Park" has poured in to the network via the backend, not to mention a robust licensing and merchandising revenue stream.

But this time around, they are poised to haul half of the unknown -- but up to now quite modest -- sum awaiting them on the Internet, where "Park" footage has been a fixture of Comedy Central's dot-com strategy, not to mention illegal file-sharing.

Also part of the deal is the formation of a digital animation studio launched jointly with the Viacom-owned channel, which would participate in any new programming spawned under the venture. South Park Digital Studios would come under the Web site it launched earlier this year, Southparkstudios.com (HR 1/8).

The deal represents a coup for Kevin Morris, attorney for Parker and Stone, and Doug Herzog, president of MTV Networks Entertainment Group, who ran Comedy Central when "Park" became the channel's first breakout hit. Parent company Viacom also could use a boost in the digital domain, where the company has been criticized on Wall Street.

Abel Lezcano, a lawyer at Del Shaw Moonves Tanaka Finkelstein & Lezcano whose clients include "Desperate Housewives" creator Marc Cherry, was less impressed by the ad split than the total value of the pact.

"To me that's not as big a deal as if Comedy Central had given them a share of ad revenue from TV broadcasts, but the total amount is pretty big," he said. "The Big Four networks still won't let you share in any form of advertising (broadcast or Internet) because they sell ads across all platforms and don't want to separate it out, so in that respect, it's different."

Dan Black, partner at Greenberg Traurig in Santa Monica, agrees that this is not a precedent-setting deal.

"I've seen deals like that before with Web site revenue splits," he said. "The paradigm is familiar, but the $75 million is recognition of the success of the show."

But with the ink still drying, speculation already has begun as to what will be the next TV franchise to command a payday of similar scope. Bigger franchises from "The Simpsons" to "Saturday Night Live" also have established online presences that could complicate future negotiations.

Sameer Mithal, a principal with Interactive Broadband Consulting Group of Princeton, N.J., believes that only A-list content players will get a slice of the digital pie. "A lot of people are going to ask for it, but very few are going to get it," he said. "Someone just starting out doesn't have the leverage of the 'South Park' guys."

Lightning may well strike twice at Comedy Central, which already may be negotiating with another Internet darling: "The Daily Show" anchor Jon Stewart, whose current four-year contract expires at the end of 2008. The current deal for "Park" was also scheduled to elapse late next year.

James Dixon, who manages Stewart, applauded the "Park" pact but said his client is not concerned. "We'll see what happens with his next deal, but 'Daily' is a different animal than an animated series," he said. "A lot more than digital needs to be discussed."

Matthew Belloni and Nellie Andreeva in Los Angeles and Alex Woodson in New York contributed to this report.
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