Why is CW for sale? Nexstar Interest in ViacomCBS, WarnerMedia Network

A tentative “For Sale” sign is at the CW and Nexstar Media Group Inc. leads the pack of potential buyers to acquire a majority stake in the broadcaster jointly owned by ViacomCBS and WarnerMedia.

Why is the largest TV station owner in the country interested in the newest linear broadcast network – and why now?

The simplest answer is that Nexstar, based in Irving, Texas, is the primary affiliate group for “Riverdale” and “Walker” home CW in key markets such as New York, Los Angeles, Dallas, Houston, and Washington, DC. CW is a logical step for the company that owns some 199 TV stations.

But that’s far from the only reason Nexstar would want to own a significant chunk of the broadcast network that was born in 2006 from a mashup between the now-defunct WB and UPN. A deal with CW’s co-owners could help Nexstar become a bigger player in streaming thanks to CW’s rights to key shows.

Taking a majority stake in the CW would also mean getting more leverage over the network’s programming strategy, as well as how it is positioned in the market, what is preoccupied and when, and the amount of local programming and local news that the network broadcasts. broadcasts.

That’s valuable to Nexstar, a company whose shares have been strong (closing Thursday at $150.80 a share) and which the industry has been waiting for to make a true entertainment game, following the slow start of basic cable channel NewsNation (a relaunched and expanded version of WGN America) since its debut in March. Nexstar surprised market viewers last August with its $130 million purchase of Washington, DC-based news channel The Hill.

A new majority shareholder like Nexstar could shift the CW programming target from the 18-34 and 18-49 demographics. Focusing on an older demo or shifting CW’s focus to a more homey, hearty direction as the way to boost ratings and viewership, and thus ad sales.

But Nexstar may also find the CW’s linear programming of even more value, depending on how the potential buyer has chosen to interact with The CW’s streaming options: the CW app and website.

Following the end of 2019 of an output deal between Netflix and parent companies ViacomCBS and WarnerMedia, the CW is now making its content available for streaming through its app and website to viewers shortly after the shows’ linear broadcasts.

While Netflix will still continue past seasons of The CW’s “Riverdale,” “The Flash,” “All American,” “Dynasty,” “Arrow,” “Supergirl,” “Black Lightning,” “Legends of Tomorrow,” “Legacies,” “The Vampire Diaries,” “The Originals,” and “Supernatural” — and will stream those shows in the future — it hasn’t and probably never will be home to new CW shows, like “Walker, ‘Naomi,'” Batwoman’, ‘All American: Homecoming’ and ‘Nancy Drew’.

Post-Netflix output deal, the CW is able to host all season episodes of many of its own shows, which are mostly produced by ViacomCBS and WarnerMedia. Previously, it could only stream a few episodes at a time of CW shows before they expired, and then wouldn’t be available until they arrived on Netflix as a complete set after the season.

The Netflix deal was valuable to CW’s current owners because it increased the popularity of many CW shows, especially “All American,” and exposed them to a wider audience, but the end of that deal and the increased focus of the CW on its own in-season streaming property could certainly make the broadcast network more attractive to Nexstar.

Certainly part of what makes the CW interesting to the many buyers watching the network is its streaming component for those who don’t already have one to their credit. In addition, The CW owns CW Seed, a free small streaming platform with a small library of mostly acquired titles and some up-to-date CW content.

Its streaming offerings are small compared to competition from giants like Netflix and Disney Plus — but it’s more than Nexstar has right now, and could be used in a whole new way as HBO Max and Paramount Plus plan their future CW releases. programming for their own platforms.

It should be noted that for the past 16 years, due to its joint venture business model, the CW network has been largely programmed by Warner Bros. or CBS. Under a new majority management like Nexstar, the CW could be much more open to doing business with other studios and content players, although the line is long for high-end content and IP these days.

“So, what does this mean for us now? CW chairman and CEO Mark Pedowitz said in a memo to staff Thursday, confirming that WarnerMedia and ViacomCBS were investigating a possible sale of the network, but did not name any potential buyers. “It means continuing to do what we do best, making The CW as successful and vibrant as we’ve always done. We have a lot of work ahead of us – with more original programming than ever, this season’s extension to Saturday nights, our growing digital and streaming platforms – and we thrive when we come together and build The CW together.”

Representatives from Nexstar, ViacomCBS, WarnerMedia and the CW declined to comment.

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