Moving forward, Nexstar is eyeing what chairman and CEO Perry A. Sook is referring to as “‘Moneyball’-inspired investments” when it comes to The CW.
In its second quarter, The CW saw a loss of $78 million. That’s an improvement of the $83 million loss the network reported during the first quarter of 2023.
During the company’s second quarter earnings call, Sook addressed The CW’s programming pivot away from the costly young adult originals the network used to be known for and toward a broader array of shows and live sports.
“It’s got to be something where we can own the back end. We can participate financially in the back end and not just be a barker channel for content that ultimately ends up on Netflix. That influences the programming that we go after, the programming we put on the air, the price we pay for it,” Sook said. “This is a 15-year-old network that now has a startup mentality.”
“We’re competing in the same league as the big four networks. But obviously, we’ve got to do it on a budget and we’ve got to do it smartly,” Sook said.
The CW’s focus on live sports was a topic that was discussed at length during the call. Sook noted that Nexstar had live sports in its “mind’s eye” when it acquired The CW in 2022. The company even began to cultivate relationships with NASCAR “literally” around the same time it closed The CW, according to Sook.
The earnings report highlighted The CW’s newfound focus on sports as an element that is “expected to accelerate viewership and revenue growth.” The CW currently has the broadcast rights to LIV Golf, and starting in September, the network will air select ACC football and basketball games. The CW will also air the NASCAR Xfinity Series starting in 2025.
The CEO also noted that the network was able to keep a handful of CW series “at substantial discounts to what the predecessor owners were charging themselves or paying themselves.” Earlier this year it was reported that both “Superman and Lois” and “All American: Homecoming” have seen significant casting scale backs and budget cuts for their upcoming seasons.
It’s no secret that The CW has struggled with profitability. Shortly after Nexstar acquired a majority stake in the network in 2022, CFO Lee Ann Gliha stated that the goal was to make the network profitable by 2025. The financial toll of the network was reflected in Nexstar’s second quarter earnings report.
Though the company reported a consolidated adjusted EBITDA of $331 million, that adjusted EBITDA would have been $405 million if The CW was excluded from the equation.
The company extended The CW network president Dennis Miller’s contract through 2027 on Monday. Additionally, Nexstar chairman and CEO Perry A. Sook noted “a slowing of losses related to The CW Network” as part of his official statements about the second quarter’s performance. During this quarter, Nexstar saw a digital revenue increase of 11.4% year-over-year, raising the metric to approximately $98 million. This was largely credited to the company’s acquisition of the broadcast network.
In August of 2022, Nexstar acquired a 75% majority stake in The CW with the networks two co-owning founders — Warner Bros. Discovery and Paramount Global — each retaining a 12.5% ownership stake in the company. This acquisition has led to a large shift for the network, both behind the scenes and from a programming perspective.
