AT&T’s WarnerMedia unit and ViacomCBS are discussing all or part of The CW Network, a joint venture between the two companies, according to published reports.
Nexstar Media Group, a large owner of CW affiliates, was mentioned as a potential buyer of the networks.
The CW is not profitable on its own, but it is a valuable outlet for programming produced by the parent companies, according to The Wall Street Journal.
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Nexstar became a big The CW affiliate when it bought the Tribune Media stations in 2019. Since then it has taken Tribune’s WGN America cable network and turned it into NewsNation, a low-rated news network.
The companies signed a new affiliation agreement last May.
Wells Fargo Securities media analyst Stephen Cahall said acquiring The CW could be a “very logical deployment of strategic capital” for Nexstar in a note Thursday morning (January 6).
“We think Nexstar is looking to balance returning free cash flow to shareholders while also pivoting the company gradually away from dependence on Big Four retrans cash flows via digital, political and national networks,” said Cahall.
The strategy would involve a greater focus on content creation and digital acquisitions, Cahall noted.
“At issue will be whether Nexstar investors like the heavier M&A strategy vs, giving all cash back,” Cahall said. “We think the relatively recent addition of Lee Ann Gliha as CFO has signaled a more acquisitive stance, and thus the deal should not come as a major surprise.”
AT&T is in the process of undoing its expensive foray into the media world by spinning off WarnerMedia and selling it to Discovery. ■
