Nexstar CEO Perry Sook said the company’s acquisition of the CW has already paid for itself in terms of adding muscle to the company’s distribution negotiations.
The exec made the comment at the start of Nexstar’s fourth-quarter earnings call with Wall Street analysts. Earlier, Nexstar reported a 45% surge in advertising revenue during the election-fueled quarter. Total revenue of $1.486 billion climbed 19% from the year-earlier period, but came in just shy of analysts’ consensus forecast for $1.5 billion.
Nexstar last year acquired 75% of the CW, with prior 50-50 partners Warner Bros Discovery and Paramount Global retaining 12.5% stakes. The broadcast giant’s plan for the network is to make it profitable by 2025 by altering its programming mix. One new piece of programming is a slate of 14 Saudi-backed LIV golf tournaments.
The CW deal involved no upfront cash or stock considerations for Nexstar. Instead, the company took on the broadcast network’s debt, which had piled up during the many years when it was used as a glorified marketing platform for pricey scripted series.
Sook said by having the CW in the company’s lineup, conversations with distribution partners have yielded material benefits equivalent to the company’s assumption of debt. He didn’t offer specific figures.
CFO LeeAnn Gliha said the financial results for the CW will be broken out separately in future reports.
The acquisition of the CW, which closed last September 30, generated $30 million in one-time expenses during the quarter Gliha said.
Sook noted that Nexstar’s stock was one of just four posting gains in 2022, a brutal year in the media and tech sectors. He credited the company’s focus on “tried and true” broadcast assets. The CW’s streaming app came aboard with the application, but it is free, ad-supported and widely distributed, giving the company and different strategic hand than media rivals focused on managing subscriber acquisition and churn.