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Earlier this week, The CW chairman and CEO Mark Pedowitz was among the TV execs who told Adweek his top priority for 2022: “After getting back to the office, exploring new ways to thrive.”
He might be tackling that much earlier than anticipated. This morning, Pedowitz confirmed reports that The CW’s joint owners—WarnerMedia and ViacomCBS—are considering selling all or part of the broadcast network.
Nexstar Media Group is in the lead to buy at least a controlling stake in The CW, according to The Wall Street Journal, which first reported the news Wednesday night.
The CW launched in 2006, following the merger of broadcast networks The WB (owned then by Warner Bros., now WarnerMedia) and UPN (owned then by CBS, now ViacomCBS). Those two companies have been the sole suppliers of content to the network.
While talks could still fall apart, the most likely scenario, according to The Journal, would see Nexstar take a controlling stake in The CW, while ViacomCBS and WarnerMedia would remain as minority owners and continue to be the primarily suppliers of content.
None of the companies involved have commented publicly, but Pedowitz confirmed the discussions in a memo sent to his staff Thursday morning.
“As many of you are aware, over the past year or so, this transformative time in our industry has led to a series of business activity across media and content companies,” Pedowitz wrote. “Given that environment right now, ViacomCBS and Warner Bros. are exploring strategic opportunities to optimize the value of their joint venture in The CW Network.”
He continued, “It’s too early to speculate what might happen, but we promise to keep you updated as we learn more.”
When talking to reporters last May, Pedowitz said the upcoming WarnerMedia-Discovery merger, which had been announced just a week earlier, did not impact The CW’s plans “at the moment.” He added, “we’re going to adapt, put our heads down and do our job.”
Pedowitze reiterated that sentiment in today’s memo: “So, what does this mean for us right now? 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.”
How The CW makes money
While The CW is not profitable as only a broadcast network, it generates significant money for its owners, especially when its shows are sold to streaming services—especially as part of a lucrative deal with Netflix for much of last decade. That also why for years, long before his linear peers, Pedowitz stressed that The CW didn’t care which platform audiences watched its content on, as long as they watched, period.
For years, The CW benefitted from a “Netflix bump” as shows like Riverdale, The Flash and All American saw enormous audience lifts after their most recent seasons move to Netflix. But that deal ended in 2019; since then, all of the network’s new series have migrated to WarnerMedia’s HBO Max streaming service.
The CW was the first broadcaster to wrap upfront talks last year, as the network pushed for CPM (cost per thousand viewers reached) increases between 19% and 21%. Unlike its rivals, the network had more linear inventory to bring into negotiations after expanding its schedule to Saturday nights in October, programming all seven days a week for the very first time.
While marketers shifted some linear ad spend to digital in last year’s upfront, that was not an issue for The CW during negotiations, Rob Tuck, evp, national sales, The CW, told Adweek in May.
“We’ve been doing it for over 10 years; that shift has happened on The CW,” he said. “It had to, because our young audience went there; they’re the first to adapt and to try new things. And we know the advertisers follow the eyeballs.”
