The CW’s New Owner, Nexstar Media, Updates Investors On “Offensive And Defensive” Reasons For Its Acquisition Of The Broadcast Network

Nexstar Media Group, which last year acquired 75% of The CW, updated investors on the “offensive and defensive” rationale for the acquisition.

Company executives convened a 30-minute conference call this morning, taking investors through a 20-slide deck but taking no questions at the end of the session. Nexstar will release its fourth-quarter financial results on February 28 and is expected to conduct its customary Q&A with Wall Street analysts after those numbers are reported.

CFO Lee Ann Gliha said the CW deal last fall, which came in exchange for no upfront cash or stock, will enable Nexstar to evolve from its roots in local broadcasting to a player in the national broadcast ad business. Paramount Global and Warner Bros Discovery — the current parents of network founders and longtime 50-50 partners CBS and Warner Bros — each retain 12.5% stakes but are now passive investors.

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“As they say, what’s old is new again and we saw that manifest in 2022,” president Tom Carter said on the call. Carter, Gliha and CEO Perry Sook emphasized that theme, expressing their conviction that traditional TV is not dead and citing the streaming marketplace’s shift toward ad-supported models as just the latest evidence. Sook noted that Nexstar was one of just four stocks in the media sector to post gains in 2022, with most others falling between 30% and 60% in the worst year for the markets since the financial crisis of 2008.

Despite the downbeat narrative around cord-cutting, which is shaving millions of pay-TV homes a year, viewers continue to tune in, Nexstar said, especially for live news and sports. One slide in the presentation projects the overall broadcast industry will grow to $26.85 billion by 2032, from $21.45 billion in 2022. Political advertising injects meaningful revenue every two years and digital is ticking up, but those contributors account for just a fraction of the overall financial picture, Nexstar affirmed, with core station revenues expected to remain stable due to distribution fees and other factors.

Execs reiterated their forecast for the CW to become profitable by 2025. A slide in the presentation noted that the acquisition of the network “protects existing television advertising and distribution
revenue generated by Nexstar’s 37 CW-affiliated stations.” Sports and news programming moves like the recent pact with LIV Golf, will also be proactive moves aimed at delivering viewers without the previous costs associated with the young-skewing scripted fare that had long been the CW’s signature. The presentation did not include any updates on programming.

NewsNation, the cable news channel created from what had been WGN America prior to Nexstar’s acquisition of Tribune Media in 2019, was another area of focus during the call. Execs emphasized that it has been profitable since it launched in rebranded form in 2020. They also noted their plans to program it with 24 hours a day of news from Monday through Friday by the end of 2023 and then fully 24/7 news by the end of 2024.

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