Nexstar CEO Discusses Innovative Strategy for The CW and Prioritizing Exclusive Content Over Streaming

Looking ahead, Nexstar is embracing a “Moneyball” approach under Chairman and CEO Perry A. Sook’s guidance to shape The CW’s future.

During the second quarter, The CW reported a loss of $78 million, marking an improvement from the $83 million loss recorded in the first quarter of 2023.

In a recent earnings call, Sook outlined The CW’s strategic shift away from its previous emphasis on costly young adult originals, moving towards a more diverse lineup that includes a broader range of shows and live sports events.

Sook emphasized the importance of content ownership and financial participation in backend revenues. This shift influences their programming decisions, content choices, and financial commitments. He stated, “Our focus is on content that retains value, not merely serving as a platform for content that ultimately lands on Netflix. This approach shapes our content acquisition, programming selection, and budgeting strategy.” He added, “Despite being a 15-year-old network, we are now operating with the vigor of a startup.”

“While we’re competing alongside the major networks, we recognize the necessity of achieving this within a budget and with strategic efficiency,” Sook pointed out.

The discussion also revolved around The CW’s concerted move towards live sports content. Sook highlighted that Nexstar’s acquisition of The CW in 2022 was accompanied by a vision of integrating live sports content. The company even initiated partnerships with NASCAR around the same time as The CW’s acquisition.

The earnings report underscored The CW’s increased focus on sports content as a pivotal driver of enhanced viewership and revenue growth. The CW has secured broadcast rights for LIV Golf and will soon begin airing select ACC football and basketball games in September. Additionally, the network is set to reveal the NASCAR Xfinity Series starting in 2025.

Sook also revealed that The CW successfully negotiated lower rates for several series than the previous owners had paid. Recent reports confirmed cast size reductions and budget for upcoming seasons of “Superman and Lois” and “All American: Homecoming.”

Addressing The CW’s profitability struggles, CFO Lee Ann Gliha stated shortly after Nexstar acquired the majority stake in 2022 that the network aims to become profitable by 2025. The network’s financial challenges were evident in Nexstar’s second-quarter earnings report.

While the company reported a consolidated adjusted EBITDA of $331 million, excluding The CW, it would have resulted in an adjusted EBITDA of $405 million.

Dennis Miller’s contract as The CW network president was extended through 2027. Perry A. Sook highlighted a reduction in losses tied to The CW Network as a significant aspect of the second quarter’s performance. Nexstar’s digital revenue also saw an 11.4% year-over-year increase during the quarter, reaching approximately $98 million, primarily attributed to the acquisition of the broadcast network.

Nexstar acquired a 75% majority stake in The CW in August 2022, while the network’s co-founders — Warner Bros. Discovery and Paramount Global — retained a 12.5% ownership stake each. This acquisition has ushered in substantial transformations for the web, both operationally and in terms of programming direction.

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