It’s official: Nexstar buys The CW

No cash is exchanged; big changes are planned

Television’s worst kept secret was finally made official Monday as Irving, Tex.-based Nexstar has acquired a majority stake in The CW from Warner Bros. Discovery and Paramount Global.

Speculation has been branded about since January, when word came both Warner and Paramount were looking to unload the fifth network and Nexstar was rumored to be the front runner. In May, The CW canceled as many as nine shows during their upfronts, fueling even more speculation the network would be sold. 

With the purchase, Nexstar now owns 37 CW and CW Plus affiliates, who are now owned-and-operated stations including WPIX New York (owned by a third party but is run by Nexstar) and KTLA Los Angeles, and also includes KDAF Dallas-Ft. Worth; WDCW Washington, D.C.; and KIAH Houston, accounting for five of the top ten markets. Due to the ownership caps being at 39 percent, it is unlikely Nexstar would buy CW stations owned by CBS, who under parent Paramount is now reduced to a minority owner, at 12.5 percent the same as WBD, also at 12.5 percent, giving Nexstar a 75 percent ownership stake.

One potential move could be the possible return of CW programming to Nexstar’s Chicago station WGN-TV, who gave up the network in 2016 to run more sports and local programming. Since then however, WGN lost the rights to all pro sports teams to local regional sports networks and Apple TV +, respectively. Currently, CW programming airs on Weigel’s WCIU, who assumed the affiliation from Fox-owned WPWR in September 2019. 

Other potential switches where Nexstar owns non-CW affiliates could take place in Philadelphia (WPHL), San Francisco (KRON) and Tampa (WTTA.) All three are My Network TV affiliates and the current CW stations in those cities are owned by CBS.  

“Our acquisition of The CW is strategically and operationally compelling, as it will enable us to leverage our operational experience to improve the Network’s performance through our management of this powerful national platform”, said Nexstar CEO Perry Sook. “We plan to apply the same strict financial standards to operating The CW as we apply to our other businesses.”

Mark Pedowitz is staying in his role as CW chairman and chief executive officer. The transaction, where no cash was exchanged (similar to the recent Sun-Times/WBEZ non-profit merger), is expected to close in the third quarter of this year – meaning very shortly, perhaps by the end of September. As a result, Nexstar management takes over The CW immediately.

In a conference call with investors Monday, Nexstar EVP-CFO Lee Ann Gilha said it’s no secret The CW “isn’t profitable” and aims to make it so by 2025. Even though Paramount and WBD will continue to supply programming to the network, the look of The CW will definitely change – away from the teen and young-adult programs the network was known for since it launched in 2006, as a result of a merger between The WB and UPN. Last year, The CW tied for 21st place among all linear networks, behind ESPN and Ion and just ahead of diginet MeTV. 

“We have reviewed our plan and operating strategy with our partners — Paramount Global and Warner Bros. Discovery — and our partnership resulted in them continuing to provide content, transition services and capital as the Nexstar-led CW can drive value for [their] 25% ownership,” said Nexstar COO Tom Carter.

The programming shift comes as many young viewers are shifting away from linear television and onto online streaming platforms as research done by Nexstar showed The CW’s average median age is 58. With local stations and syndication abandoning younger demos, Nexstar is aiming to make programming more compatible with local affiliates’ newscasts, whose main demo is adults 25-54. A common complaint with Tribune executives was the young skew of CW programming, feeling it was an inadequate lead-in to their local newscasts (Tribune was purchased by Nexstar in 2019.) In 2008, The CW created a Sunday night block of more broader demo-friendly programming leasing the night to Media Rights Capital, only to last two months. 

In July of the same year, this space wasn’t kind to The CW, taking the network to task for the way it was run by then-network president Dawn Ostroff.

The CW joins Nexstar’s other properties, including 190-plus TV stations, NewsNation, and political website The Hill, who recently launched a FAST channel. Nexstar’s majority control of a TV network harkens back to a time when ABC, CBS, and NBC’s main business were basically the networks and the local stations they owned (though basically due to the since-repealed fin-syn rules, which kept them from owning studios.) Don’t be surprised to see other Nexstar content on The CW’s platforms, including NewsNation and The Hill. “We will continue to grow [The CW App] by adding content and leverage Nexstar’s content and other programming assets,” said Sook. 

With The CW in transition, we’ll see how everything shakes out, from affiliate upgrades to what kind of programming The CW will employ, starting in the 2023-24 season which means we’ll see less superhero and young-adult shows (likely eliminated entirely) and more “broader, cheaper” fare. It’s the direction linear TV is headed and The CW is just following the flow. 

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