As Nexstar Deal For Control Of The CW Nears Finish, Ownership Structure Comes Into Focus

Nexstar Media Group’s pursuit of majority control of the CW is nearing the finish line, according to people with knowledge of the pending transaction.

Word of the deal first surfaced last January, but it has taken some time to iron out details. As currently structured, the deal will see Nexstar take a 75% stake in the broadcast network, and current partners Paramount Global and Warner Bros Discovery each take 12.5%. Sources indicated there is still some chance the tentative agreement could unravel, but if it stays on track it could be formalized in the next few weeks.

The Wall Street Journal had the first report of the ownership structure and the apparently imminent closing of the acquisition.

Nexstar, the No. 1 owner of local TV stations in the U.S. as well as the owner of cable network NewsNation and digital brands like The Hill, would make a logical new owner of the CW because it already has the most affiliates of the network. While both current parents are looking — as are all media companies — to streamline their operations and tighten up their balance sheets, the Nexstar scenario is an organic way to stanch some red ink.

Nexstar, Paramount and Warner Bros. Discovery declined to comment when contacted by Deadline.

Created in 2006 as a way of consolidating at UPN and the WB, the CW has been a 50-50 venture between the various owners of CBS and Warner Bros since then, generating a string of shows with youth appeal like Gossip Girl, Riverdale and All-American. Viewership on the linear network, consistent with that on across broadcast TV, is 50-plus, but the companies free, ad-supported streaming app and social channels draw younger, avid audiences concentrated in the desirable 18-to-34 demographic.

Macroeconomic conditions have worsened considerably since the deal first became public at the start of the year, with inflation skyrocketing and rising interest rates bogging down many business deals. None of those factors are expected to have a bearing on the CW transaction, insiders said. For one thing, there are no upfront costs for Nexstar. Instead, the company has agreed to shoulder the losses at the network, which could be north of $100 million this year.

The strategic plan moving forward will be to run the CW as a fully sustainable broadcast network, rather than optimizing it for streaming. Even though the network itself has consistently booked losses, the joint venture partners have made hefty profits by licensing CW shows to Netflix, sometimes agreeing to renew shows whose linear ratings did not appear to justify those re-ups. As they started to plan investments in their own streaming services, HBO Max and Paramount+, the current parents ended the CW output deal with Netflix in 2019.

As the network made its annual upfront presentation to media buyers last month in New York, CW chief Mark Pedowitz alluded to the looming change of ownership and a “time of transition.” The CW announced the cancellation a significant number of shows as it readied its 2022-23 schedule. Among the discontinued were DC’s Legends of Tomorrow, LegaciesBatwoman, Naomi, Dynasty, Charmed, Roswell, New Mexico, In The Dark, and 4400.

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