Local TV Giant Nexstar Seals Deal to Buy 75 Percent Stake in The CW, Reshaping Broadcast Landscape

The CW is getting new ownership.

The broadcast network, currently operated as a joint venture between Warner Bros. Discovery’s Warner Bros. TV and Paramount Global’s CBS Studios, is selling a 75 percent stake to local broadcaster Nexstar. Paramount and Warner Bros. Discovery will each retain a 12.5 percent stake in the venture.

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The CW will continue to order programming from the two entertainment giants, though Nexstar is likely to look elsewhere for originals.

During a call to discuss the deal, Nexstar executives said they plan to turn CW profitable by 2025. Nexstar CEO Perry Sook made the purchase as a way to diversify his company’s content portfolio and strengthen its appeal to advertisers by increasing its exposure. National advertising market.

News that The CW was on the block first leaked in January, with Nexstar cited as a possible suitor at the time. Other firms, notably some major private equity players, have also kicked the tires on the broadcaster.

CW chairman and CEO Mark Pedowitz confirmed the short-skewing broadcast network was for sale earlier this year, telling staff: “So, what does that mean for us at this point? That means we get to keep doing what we do best, making The CW as successful and vibrant as we’ve always been.

Nexstar owns some 199 local stations in dozens of local markets, as well as the cable news channel NewsNation, and the DC Digital publication. the hillAmong other assets.

Pedowitz will continue to serve as CW’s chairman and CEO, with responsibility for day-to-day operations. The transaction is expected to close in the third quarter.

“Nexstar, together with its partner stations, is the nation’s largest local television broadcasting company and the largest CW affiliate group with 37 CW and CW Plus affiliates, including affiliates in five of the top 10 DMAs, which 32 percent of the network’s national reach,” the company said Monday. “The proposed transaction will strengthen revenue opportunities for Nexstar shareholders as the largest CW affiliate, diversify its content beyond news, By increasing its exposure to the national advertising market, it is expected to establish itself as a participant in advertising video-on-demand services and improve CW ratings, revenue and profitability by prioritizing programming for the network’s broadcast audience. to make

Nexstar CEO Sook said: “Our acquisition of CW is strategically and operationally compelling, as it will enable us to leverage our operational experience to improve network performance by managing this powerful national platform. We plan to apply the same strict financial standards to operating CW as we apply to our other businesses.

George Cheeks, Paramount’s CBS president and CEO, added: “This new ownership structure allows us to redeploy capital to other content platforms at Paramount, partnering with Nexstar and Warner Bros. Discovery on the next chapter of The CW. enables.”

And Channing Dungey, Chairman, Warner Bros. Television Group, said: “For 16 seasons, The CW has been home to some of the most important and generation-defining programs in television, from the iconic DC Super Heroes to Greg Berlanti’s Arrowverse series. the Vampire DiariesAnd everything in between, including All Americans Franchise, original gossip Girl, kung fu, nikita, Riverdale, Smallville, and many more. It was also home to the network supernatural, for 14 of its 15 seasons, the US. TV is the longest-running live-action fantasy series in the history of We are excited that the supernatural story will continue The Winchesters Premiering this fall, we look forward to continuing to collaborate on our joint series and future projects under the direction of Nexstar.

The CW is unique among national broadcast networks, with a strategy that includes a more narrowly focused target demographic (adults 18-34), and fewer hours of original programming than competitors NBC, ABC, and CBS, although in the past The network has expanded. Seven nights a week for a few years. The network has never been profitable since Warner Bros. TV and CBS Studios merged the former UPN and The WB Networks in 2006. However, parent companies have benefited greatly from The CW, which has become a reliable and consistent buyer of their programming.

The network exclusively includes scripted originals produced by both Warners and CBS Studios, supplemented by some unscripted shows and low-cost Canadian series acquired to help round out its slate. Because Pedowitz developed The CW into a year-round original. While the network itself didn’t make a profit — it wasn’t designed to do so — the two studios pocketed the $1 billion Netflix output deal, as well as a share of international sales for well-known titles. . dynasty.

While this model proved to be very fruitful, the network’s parent companies chose to extend the Netflix deal to promote their respective streamers, HBO Max and Paramount+, with programming rather than viewing all of their future CW originals on Netflix. done What’s more, the need to retain global programming rights for all streamers as platforms expand into foreign markets means the end of those lucrative international sales.

Without a revenue stream from Netflix and overseas sales, The CW’s business model no longer proved profitable and Warner and CBS Studios began exploring sales options.

The pending sale also meant that the CW, for the first time in years, is trimming its scripted ranks rather than renewing its entire slate. The network’s cancellations began in late April with Greg Berlanti dropping the DC Comics drama. Batwoman And Legends of Tomorrow; Experience series Charming, dynasty, legacy (The last trace of the CW’s former definitive series the Vampire Diaries), Roswell, New Mexico And in the darkWith the first year show 4400, Naomi and, more recently, Nancy Drew spin off Tom Swift. The cancellation campaign marks the first time in a decade that The CW has removed more than half of its roster of US originals.

Sources say CW’s digital assets — including CW Seed, CW App and CWTV.com — were of particular interest to Nexstar as the company looks to grow digital and advertising revenue. Ironically, Pedowitz’s digital push is being called “hype” by the same allies who now want to cash in on his success.

It’s not immediately clear what Nexstar’s programming strategy for the CW will be, though sources have speculated THR NewsNation-branded programming will likely join the lineup as early as this year. Other sources expect Nexstar to open up the network to acquisitions from outside studios while still working on a certain percentage of scripted originals with the Channing Dungy-led Warners and David Stapp-fronted CBS studios that will decline over time. is expected. The two studios may split the network entirely over time, sources say.

With the deal just announced and regulatory approvals likely months away, The CW will need to operate with a business-as-usual attitude for now. Pedowitz has renewed All American, The Flash, Kung Fu, Nancy Drew, Riverdale, Superman and Lois And walker For next season.

Pedowitz also ordered a handful of new series for the 2022-23 broadcast season. All three new shows are based on existing intellectual property: DC Gotham Knights, supernatural prequel The Winchesters And walker spin off independence To help offset the cancellations, The CW increased low-cost overseas acquisitions such as shows Family law helps fill its schedule.

With the advance completed, there likely won’t be many programming changes for Nexstar to make immediately. Upfront wrapped up in mid-June, with CPM growth in the high single digits and low double digits, says a source familiar with the business.

Ahead of its expected sale, The CW recently pulled out of its planned time before the press corps during the summer portion of the Television Critics Association’s semi-annual tour where Pedowitz was a keynote.

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