The CW’s new owner, Nexstar Media, tells investors “offensive and defensive” reasons for acquiring the network

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

Company executives hosted a 30-minute conference call this morning that led investors through a 20-slide presentation but did not take questions at the end of the session. Nexstar is due to report its fourth-quarter financial results on Feb. 28 and is expected to conduct its usual Q&A with Wall Street analysts following the release of those numbers.

CFO Lee Ann Gliha said the CW deal last fall, in exchange for no cash or stock up front, would allow Nexstar to evolve from its local broadcast roots into a player in the national broadcast advertising business. Paramount Global and Warner Bros Discovery — the current parents of network founders and longtime 50-50 partners CBS and Warner Bros — each retain a 12.5% ​​stake, but are now passive investors.

“As they say, the old is new again and we saw that manifesto in 2022,” President Tom Carter said on the call. Emphasizing this issue, Carter, Gliha and CEO Perry Sook expressed their belief that traditional television is not dead, citing the shift in the streaming market to ad-supported models as only recent evidence. Sook noted that Nexstar was one of just four stocks in the media sector to post gains in 2022, while most others fell between 30% and 60% in the markets’ worst year since the 2008 financial crisis.

Despite the grim story surrounding the cable-cutting that ravages millions of pay-TV homes each year, viewers are still tuning in, Nexstar said, especially for live news and sports. A slide in the presentation shows that the total broadcast industry will grow to $26.85 billion by 2032, up from $21.45 billion in 2022. Political advertising generates significant revenue every two years, and digital is growing, but these contributors make up only a fraction from the pictures. overall financials, Nexstar confirmed, with core station revenue expected to remain stable due to distribution costs and other factors.

Executives reiterated their forecast that CW will become profitable in 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 affiliate stations.” Sports and news moves, such as the recent deal with LIV Golf, will also be proactive moves aimed at delivering viewers without the upfront costs associated with the fledgling one-page scripted fare that has long been the hallmark of the CW. The offer did not include app updates.

NewsNation, the cable news network that spun out of WGN America before Nexstar acquired Tribune Media in 2019, was another focus of the conversation. Execs emphasized that it has been profitable in its rebranded form since its launch in 2020. They also noted their plans to program it with 24-hour Monday-Friday messaging by the end of 2023, and then with full 24/7 messaging by the end of 2024.