Comcast’s (CMCSA) European television platform, Sky, has filed a federal lawsuit against Warner Bros. Discovery (WBD), alleging a breach of their 2019 co-production agreement. Importantly, the dispute centers around the rights to a new Harry Potter series, which is set to debut on the Max streaming service in 2026.
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It is worth highlighting that the lawsuit comes amid ongoing negotiations between Sky and WBD regarding the future of HBO programming on Sky’s UK platform. With the current exclusivity deal expiring in early 2026, WBD is exploring options to license its content to other streaming services and TV networks.
WBD has denied Sky’s allegations, calling the lawsuit a “baseless attempt” to gain leverage in the ongoing negotiations.
Key Allegations Put Forth by Sky
According to the agreement, Sky has laid down the following accusations against Warner Bros.
- Exclusive Content Rights: The 2019 agreement granted Sky exclusive rights to distribute certain Warner shows in Europe for 20 years. However, Sky claims that WBD did not fulfill this obligation by failing to offer at least four qualifying series annually from 2021 to 2023.
- No “Harry Potter” Co-Production: Sky claims that Warner Bros. did not provide them the chance to co-produce shows such as the “Harry Potter” series. Sky pointed out that the Harry Potter series is highly valuable, with an estimated worth of at least $25 billion. Losing the rights to this popular franchise could significantly affect Sky’s financial performance.
- Favorable Distribution Terms: The lawsuit also claims that WBD is providing preferential distribution terms for its sports channels to Venu Sports, a new joint venture with Disney (DIS) and Fox (FOXA), in violation of antitrust laws.
This lawsuit adds to the growing list of legal challenges for Warner Bros. The company is already involved in several other legal disputes, such as with the National Basketball Association (NBA) over the loss of rights to broadcast NBA games. Also, Warner Bros., Fox, and Disney are involved in a court fight with fuboTV (FUBO) over their planned sports-streaming service, Venu.
Will Comcast Stock Go Up?
Turning to Wall Street, CMCSA stock has a Moderate Buy consensus rating based on 11 Buys and seven Holds assigned in the last three months. At $47.59, the average Comcast price target implies 14.29% upside potential. Shares of the company have gained 10% in the past three months.
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Is WBD a Good Stock to Buy?
Turning to Wall Street, WBD stock has a Moderate Buy consensus rating based on 10 Buys, six Holds, and one Sell assigned in the last three months. At $12.50, the average Warner Bros. price target implies 49.16% upside potential. Shares of the company have gained 18.03% in the past three months.
