The acquisition of CW has already paid off, says Nexstar CEO Perry Sook

Nexstar CEO Perry Sook said the company’s acquisition of the CW has already paid dividends as it has strengthened the company’s distribution negotiations.

The executive made the comment early in Nexstar’s fourth-quarter call with Wall Street analysts. Previously, Nexstar reported a 45% increase in ad revenue during the election-heavy quarter. Total revenue of $1.486 billion was up 19% from the same period last year, but fell just short of the analyst consensus forecast of $1.5 billion.

Nexstar acquired 75% of CW last year, with former 50-50 partners Warner Bros Discovery and Paramount Global retaining a 12.5% ​​stake. The broadcasting giant’s plan for the network is to make it profitable by 2025 by changing its program mix. A new part of the program is a list of 14 Saudi-sponsored LIV golf tournaments.

The CW deal did not include any upfront cash or equity considerations for Nexstar. Instead, the company took on the broadcaster’s debts accumulated over the years when it was used as a glamorous marketing platform for expensive scripted series.

Sook said discussions with distributors have resulted in substantial benefits from CW’s addition to the company’s roster, which amounts to the company taking on debt. He did not give specific numbers.

Chief Financial Officer LeeAnn Gliha said financial results for the CW will be detailed separately in future reports.

The acquisition of CW, which closed Sept. 30, resulted in one-time charges of $30 million in the quarter, Gliha said.

Sook noted that Nexstar shares were one of just four gains in 2022, a brutal year for the media and technology sectors. He praised the company’s focus on “proven” broadcast tools. The CW’s streaming app came with the app, but it’s free, ad-supported and widely available, giving the company a different strategic hand than media rivals that focus on managing subscriber acquisition and revenue.

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