On Wednesday, the Wall Street Journal said Nexstar was close to a deal that would allow the broadcaster to own 75 percent of the network, with Paramount and Warner Bros Discovery each retaining a 12.5 stake.
The financial newspaper cited unnamed sources that were familiar with the deal, noting that its sources said Nexstar would likely acquire majority control of the network by assuming around $100 million in its debt.
Nothing has been finalized, and the deal could still fall apart. But it aligns with comments from Nexstar executives that showed a strong interest in the broadcaster owning a network. Nexstar, through its acquisition of Tribune Media in 2019, is the largest independent owner of CW affiliates in the country. Tribune Media, as Tribune Broadcasting, held a financial interest in the WB Network, which merged with rival UPN in 2006 to form the CW.
Analysts say offloading a significant chunk of the CW Network would help Paramount Global and Warner Bros Discovery focus on their streaming endeavors. The pre-CW networks — the WB and UPN — helped both companies get content from their studios on a national platform. The combined CW furthered this initiative in the pre-streaming days.
Now that each company has not one, but several, streaming platforms (Warner Bros Discovery operates HBO Max and Discovery Plus; Paramount Global has Paramount Plus, Pluto TV and Showtime), the need for a combined broadcast television network has lessened, industry experts say.
Over the last decade, the CW Network has generated revenue not through its prime-time programming, but by repurposing those shows into licensing deals with streaming platforms like Netflix. Three years ago, the CW Network shifted it strategy away from licensing content to third parties in order to assume more control for their own streaming platforms.
Under terms of the proposed deal with Nexstar, Paramount Global and Warner Bros Discovery would continue creating content for the CW while giving Nexstar the ability to forge licensing deals with other production studios and distribution companies.
A deal for the CW would subject all three companies to regulatory scrutiny. Nexstar is the largest owner of broadcast stations in the country, and while the CW is not one of the top four broadcast networks by ratings, owning it as part of a portfolio that also includes more than 190 local television stations could spur federal regulators to impose heavy conditions on a sale.