Nexstar Media Group confirmed a deal to buy a 75% share of the 16-year old broadcaster.
Paramount Global and Warner Bros Discovery will retain a 12.5% ownership in the CW. They will also continue to produce scripted material for the Network. Nexstar, which had been avoiding the long-running speculation in the press about the move for months, confirmed this morning’s announcement in an SEC filing.
Mark Pedowitz will remain chairman and CEO at the CW. The transaction is expected closing in the third quarter.
Nexstar, the No. The No. 1 owner in the U.S. of local TV stations, as well the owner of cable network NewsNation as digital brands like The Hill. Nexstar is the logical next owner of The CW as it has the largest number of affiliates. Paramount and Warner Bros Discovery, the parents of CW, have been trying to improve their balance sheets.
In 2006, the CW was established as a consolidation venture at UPN/WB. The CW has been a 50-50 partnership between Warner Bros and CBS since then. This has resulted in a series of youth-oriented shows likeGossip Girl,RiverdaleandAll-American. Viewership on the linear network, consistent with that on across broadcast TV, tends to be 50 older, but the network’s free, ad-supported streaming app and social channels draw younger, avid audiences concentrated in the desirable 18-to-34-year-old demographic.
The macroeconomic environment has changed significantly since the deal became public in 2022. Rising interest rates and skyrocketing inflation have made it difficult to do business. Nexstar’s acquisition does not involve any upfront costs. Nexstar has instead agreed to take on the losses of the network, estimated to exceed $100 million in this year’s fiscal year.
The CW will continue to be a sustainable broadcast network and not be optimized for streaming. This is the strategic plan. The network has been a disaster, but the joint venture partners have earned substantial profits by licensing CW programs to Netflix. They also sometimes agreed to renew shows whose linear ratings didn’t seem to justify the renewals. They began to plan investments in their own streaming platforms, HBO Max, and Paramount+. In 2019, the parents of the CW decided to terminate the CW output contract with Netflix.