Nexstar close to acquiring majority stake of CW Network - WSJ

Nexstar Media Group is inching closer to a deal to acquire majority control over the CW Network, a TV network currently co-owned by Warner Bros. Discovery (WBD) and Paramount Global.

According to the Wall Street Journal, the deal’s terms indicate Nexstar would acquire 75% of the CW, while WBD and Paramount would each retain a 12.5% stake.

People familiar with the matter told the outlet while the talks could still fall apart, an agreement could be finalized in the coming weeks. Nexstar could assume over $100 million of the CW’s current losses.

Nexstar owns nearly 200 television stations across the U.S. It’s also a proponent of NextGen TV (ATSC 3.0). Earlier this year, Nexstar predicted the technology could generate up to $15 billion in broadcast revenue by 2030.

Nexstar taking over the CW could mean future programming would be more geared towards an older audience rather than CW’s standard young adult demographic, WSJ wrote. The CW in May cancelled 10 shows, renewing only eight for its fall lineup.

News of a possible CW sale broke in January, with the Hollywood Reporter suggesting the deal would provide Paramount and WBD (then ViacomCBS and WarnerMedia) cash to invest in their respective streaming services.

Indeed, pouring money into the broadcast network may not be the companies’ top priority. In 2019, WarnerMedia and CBS elected not to renew the CW’s deal with Netflix – a full output agreement that put CW shows automatically on Netflix after a season’s initial run on the broadcast network.

The deal’s expiration meant newer CW series could end up on either HBO Max or with Paramount. But WarnerMedia and CBS had decided to keep those CW shows on the same platform, Deadline reported in January 2021.

HBO Max is currently the go-to platform for CW series that premiered from 2019 onward. WBD CEO David Zaslav said on the Q1 earnings call that streaming is an important complement to existing and traditional monetization avenues.

Zaslav also emphasized WBD wouldn’t overspend on content to drive subscriber growth. The company shut down subscription service CNN+ just one month after its launch, with WBD aiming to redirect its CNN investment. The CW sale could be a similar case.

Paramount, on the other hand, is investing in international expansion. Paramount+ launched last week in the U.K. and Ireland, as well as in South Korea earlier this month – the company’s official entry to Asia. But Paramount is still active in the broadcast business, having just renewed a carriage agreement with Mediacom.