US broadcast groups, along with Sony and Netflix, have been tipped to be among potential suitors for US-based The CW, after its chairman & CEO Mark Pedowitz confirmed reports that the network is in sale talks.
Pedowitz, who has been at the helm of the Riverdale network since 2011, addressed “recent speculation” in a memo to staff yesterday in which he confirmed owners ViacomCBS and WarnerMedia are “exploring strategic opportunities to optimise the value” of the joint venture.
He said the discussions came amid a “transformative time in our industry” that has seen deals such as The CW’s owner WarnerMedia merging with Discovery, and Amazon buying MGM, among a slew of heavyweight M&A activity.
“It’s too early to speculate what might happen, but we promise to keep you updated as we learn more,” he added.
Suitors & international impact
Pedowitz said staff should continue “to make The CW as successful and vibrant as we have always done” and pointed to the expansion of its originals slate, as well as its “growing digital and streaming platforms”, as key areas of focus.
US-based regional operator Nexstar Media Group is reportedly most advanced in takeover discussions, but several sources have told TBI that both AVOD and SVOD streamers – and particularly Netflix – could also be interested.
Tim Westcott, senior principal analyst for digital content & channels at research giant Omdia, told TBI the “likeliest buyer” would be one of the existing broadcast station groups in the US, but added that the world’s biggest streamer could also show interest.
Netflix previously had an output deal with The CW, which handed it rights to its scripted output, and the service continues to offer some of the network’s shows, such as All American.
Sony, which is the only major without a broadcast network, could also be interested in gaining a foothold, Westcott said, but admitted the two would “be less likely” than a US broadcast group buyer.
At that head of that list is Nexstar, which operates almost 200 regional and local TV channels across the US, including affiliates of The CW. Taking ownership of the network would provide it with a more secure pipeline and ensure the end of regular contract renewals.
It could also hand Nexstar access to The CW’s digital assets such as CW Seed and provide a way to expand its nascent streaming efforts.
The potential ramifications of a sale will of course be dependent on the buyer, but reports earlier this week suggested WarnerMedia and ViacomCBS could retain a minority stake in the network.
Westcott said The CW’s “future relationship” with its existing suppliers would be key to success. “It’s not obvious how The CW would thrive if their shows moved elsewhere,” he told TBI.
And indeed, as Pedowitz noted, a potential sale comes at a momentous time for ViacomCBS and WarnerMedia, which have launched respective global streaming services Paramount+ and HBO Max in recent years.
Those launches followed the end of The CW’s output deal with Netflix in 2019, which had provided the streamer with the network’s scripted output and handed the studios a substantial revenue boost for its programming.
Some of The CW’s output has since been acquired by international buyers in the past 12 months – the BBC added Superman & Lois last year, for example – but a sale of the network could impact such content acquisitions, depending on the deal structure.
Those on the selling side could also see more opportunity if The CW opens up its supply line outside of its existing studio backers. The network has become a regular buyer of shows from outside of the US, recently adding Italian period drama Leonardo, Australian comedy Bump, UK show Dead Pixels and Canadian drama Coroner.