The CW will likely not change significantly under new ownership in the immediate future, but Nexstar Media Group wants to make it a broadcast network that appeals to a wider audience and is cost-conscious.
The company said earlier today that it will take a 75% ownership position in the network, with the remaining 12.5% held by each of the network’s previous 50/50 owners, Paramount Global and Warner Bros. Discovery. In the coming weeks, the acquisition will formally close.
During a 15-minute conference call with Wall Street analysts, executives discussed some of their first objectives but there was no opportunity for audience questions.
Other executives provided more concrete information after Nexstar CEO Perry Sook opened the call by restating the justification for the deal, which will see the company assume the CW’s debt without paying any cash or shares upfront.
The objective, according to CFO Lee Ann Gliha, is to turn the CW profitable by 2025.
It’s no secret that the CW is not financially successful, but she said that this is not normal for broadcast or cable networks with wide distribution. In actuality, no other broadcast network runs at a continuous loss, according to statistics from SNL Kagan.
The path to profitability will include a large reduction in expenses as one important stage. As we carry out our plan, we anticipate investing a low nine-figure sum over the next three years, according to Gliha. Instead of continuing to be a drain on cash flow, we see this sum as a proxy for a purchase price or a long-term investment. You are familiar with us. We prioritise profit and cash flow and anticipate this asset will become profitable.
Tom Carter, president and chief operating officer of Nexstar, confirmed that Paramount and WBD would continue to develop scripted originals for the network, but only “mainly” from 2022 to 2023. Beyond that, there are no guarantees, though Nexstar “will have the option to continue the collaboration.”
Carter explicitly stated that the CW will be retooled with an emphasis on its prior cost structure under founding partners CBS and Warner Bros., despite the remarks lacking many specifics. These corporations frequently saw greater financial potential in programming shows that could be offered at high margins to subscription streaming services as they were both suppliers and network owners. In 2019, The CW ended its long-standing production agreement with Netflix as both parent firms increased their own investments in new SVOD services.