CW majority share sales explored by WarnerMedia and ViacomCBS; Nexstar among freers – Deadline

CW can get a new majority winner. Fifteen years after the launch of the broadcasting network, its co-parents, ViacomCBS and WarnerMedia, are considering a controlling stake sale, sources confirm to Deadline. Nexstar Media Group, which is CW’s largest affiliate group after the acquisition of Tribune, is believed to be among interested buyers. Sources warn that talks with several suitors are in exploratory stages and that no agreement is imminent.

The potential sale, first reported by WSJ, comes amid a change of ownership for WarnerMedia, which is being acquired by Discovery, pending regulatory approval. None of the CW architects, who replaced WB and UPN in 2006, are still around, especially former CBS boss Les Moonves, who was the driving force behind it. Since the creation of the CW, CBS merged with Viacom while WarnerMedia was acquired by AT&T, which now sells it to Discovery.

The CW, which caters to young adults, has defied expectations to be 1[ads1]5 years old when many had predicted that it would fold or switch to cable / digital early in the race. The network’s business model has worked due to its unique layout, and is partly owned by two large studios that deliver all script programming. While the CW has never been profitable as a stand-alone entity, it has created value for its studio parents, delivering American broadcasting for programs that they can then leverage internationally and on streaming. Among the valuable assets the CW has helped create for its studio partners include the Arrowverse series, Riverdale, All American and Gossip Girl (Warner Bros.) and Walker, dynasty and Virgin Jane (CBS Studios)

It’s hard to recreate, and that’s why I hear the most likely scenario would be for WarnerMedia and ViacomCBS to sell a majority stake in CW while retaining minority ownership and remaining suppliers. The current CW model makes it impossible for external studios to produce shows for the network; it would be interesting to see if a new majority owner would change the terms so that other studios could network with Warner Bros. TV and CBS Studios.

For the past decade, the CW has been run by Mark Pedowitz, chairman and CEO, who took on the then-female skewed network and expanded its appeal, balancing audiences with shows such as the DC dramas and Riverdale at the same time as a digital path for the brand.

The CW got a big shot in the arm in 2011 when Netflix paid $ 1 billion for the streaming rights to the entire network. A number of CW series remain on Netflix, and cost money, but in 2019 WarnerMedia and CBS Studios chose to terminate the agreement and instead direct the series they produce for CW to their own streamers. (In the beginning, all CW shows were directed to WarnerMedia’s HBO Max, which emerged as the streaming destination for CW content.)

The end of the Netflix deal gave the CW stacking rights during the season to their shows, which has been the key to the network’s expanding its digital footprint. An early user of streaming, CW has a formidable digital drive and oversized reach on social media, which can be attractive to buyers, which could potentially include streamers, I hear.

A Nexstar agreement would bring the CW in line with the other broadcasting networks, following the traditional model of a network that controls the main connected stations. It will eliminate the stress over the future of the network every time the contracts with the large CW-affiliated groups are to be renewed.

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