- Nexstar Media Group, Inc (NASDAQ:NXST) is on the verge of acquiring majority control of the CW Network from Warner Bros. Discovery, Inc (NASDAQ:WBD) and Paramount Global (NASDAQ:PARA), the Wall Street Journal reports.
- The leading owner of local television stations would acquire 75% of the CW, a broadcast network aimed primarily at teens and young adults, with Paramount and Warner Bros. Discovery each retaining 12.5% stakes.
- Nexstar looks to assume a significant portion of the network’s current losses, which could exceed $100 million.
- Also Read: Nexstar Media Tops Q1 Backed By Advertising, Distribution Revenue Growth
- CBS, the broadcast network of Paramount and Warner Bros., will likely continue to create content for the CW.
- Meanwhile, Nexstar looks to acquire shows from other producers as well.
- Paramount and Warner Bros. Discovery will likely retain several hundred million dollars in content-licensing revenue from pre-existing deals, including a significant pact with Netflix Inc (NASDAQ: NFLX).
- The CW was born from the 2006 merger of the struggling Warner Bros.’ WB and CBS’s UPN networks.
- Although the CW rarely made a profit, it was very successful for its parent companies, primarily due to the Netflix licensing agreement.
- In 2019, the CW’s parent companies terminated the Netflix agreement to avail the CW content for their streaming services, Paramount+ and HBO Max, and cut costs.
- Paramount Global is focused on its streaming service and revamping its Paramount movie studio, while Warner Bros. Discovery, under new ownership, is looking to cut costs and prioritize businesses.
- Price Actions: PARA shares traded lower by 1.12% at $24.80 in the premarket on the last check Thursday. WBD shares traded lower by 1.52% at $12.97.
