What’s Driving Nexstar’s Interest in the CW Network — and Why Now?

A tentative “For Sale” sign is up at the CW and Nexstar Media Group Inc. is leading the pack of potential buyers to acquire a majority stake in the broadcaster jointly owned by ViacomCBS and WarnerMedia.

Why is the nation’s largest TV station owner interested in the youngest-skewing linear broadcast network — and why now?

The simplest answer is that Nexstar, based in Irving, Texas, is the core affiliate group for “Riverdale” and “Walker” home CW in major markets such as New York, Los Angeles, Dallas, Houston and Washington, D.C. So Nexstar’s pursuit of CW is a natural move for the company that owns some 199 TV stations.

But that’s far from the only reason Nexstar would want to own a significant portion of the broadcast network born in 2006 out of a mashup between the now-defunct WB and UPN. A deal with the co-owners of CW could help Nexstar become a bigger player in streaming thanks to rights that CW holds for key shows.

Taking a majority stake in the CW would also mean having an increased sway over the network’s programming strategy, as well as how it’s positioned in the marketplace, what gets preempted and when, and the amount of local programming and local news the network airs.

That’s valuable for Nexstar, a company that’s stock has been strong (closing Thursday at $150.80 per share) and that the industry has been waiting on to make a real entertainment play, following the slow start that its basic cable channel NewsNation (a re-launched and expanded version of WGN America) has seen since debuting in March. Nexstar surprised market-watchers last August with its $130 million purchase of Washington, D.C.-based news outlet the Hill.

A new majority owner like Nexstar could shift the CW programming target away from the 18-34 and 18-49 demographics. Focusing on an older demo or changing up CW’s focus to a more homey-heartland direction as the way to boost ratings and viewership, and thus ad sales.

But Nexstar may also find the CW’s linear programming to be of even more value depending on how the potential buyer chose to handle the The CW’s streaming options: the CW App and website.

Following the 2019 end of an output deal between Netflix and parent companies ViacomCBS and WarnerMedia, the CW now makes its content available for streaming via its app and website to viewers soon after the shows linear airings.

Though Netflix still holds previous seasons of The CW’s “Riverdale,” “The Flash,” “All American,” “Dynasty,” “Arrow,” “Supergirl,” “Black Lightning,” “Legends of Tomorrow,” “Legacies,” “The Vampire Diaries,” “The Originals” and “Supernatural” — and will have dibs on streaming future seasons of those shows — it isn’t and likely won’t ever be the streaming home of new CW shows, like “Walker,” “Naomi,” ‘”Batwoman,” “All American: Homecoming” and “Nancy Drew.”

Post-Netflix output deal, the CW is able to house all of the in-season episodes of many of its own shows, which are mostly produced by ViacomCBS and WarnerMedia. Previously, it could stream just a few episodes at a time of CW shows before they expired and would then only be available once they arrived as a complete set on Netflix post-season.

The Netflix deal was valuable for CW’s current owners as it increased the popularity of many CW shows, notably “All American,” and exposed them to a larger audience, but the end to that agreement and the CW’s increased focus on its own in-season streaming property could definitely make the broadcast network more attractive to Nexstar.

Certainly part of what makes the CW of interest to the any of the multiple buyers looking at the network is the streaming component for those that don’t yet have one to their name. Additionally, The CW owns CW Seed, a free small streaming platform that has a small library of mostly acquired titles and a little current CW content.

The streaming offerings are tiny compared to competition from giants like Netflix and Disney Plus — but it’s more than Nexstar has now, and could be utilized in an entirely new way as HBO Max and Paramount Plus plan to take their future CW programming for their own platforms.

It should be noted that for the last 16 years, because of the joint-venture business model, the CW Network has largely been programmed by Warner Bros. or CBS. Under a new majority management like Nexstar, the CW could become much more open to doing business with other studios and content players, although the line is long for top-shelf content and IP these days.

“So, what does this mean for us right now? ” CW chairman and CEO Mark Pedowitz said in a memo to staff Thursday, in which he confirmed WarnerMedia and ViacomCBS were exploring a potential sale of the network, but did not name possible buyers. “It means we must continue to do what we do best, make The CW as successful and vibrant as we have always done. We have a lot of work ahead of us – with more original programming than ever, this season’s expansion to Saturday night, our growing digital and streaming platforms – and we thrive when we come together and build The CW together.”

Representatives for Nexstar, ViacomCBS, WarnerMedia and the CW declined to comment.

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