A new majority owner for the CW is possible. Sources tell Deadline that the broadcast network's co-parents, ViacomCBS and WarnerMedia's Warner Bros, are considering selling a majority stake fifteen years after its founding. Nexstar Media Group, which became the CW's largest affiliate group after acquiring Tribune, is rumored to be one of the potential bidders. Sources warn that talks with many suitors are still at the early stages, and that no agreement is close.
The WSJ originally reported the probable sale, which comes amid a change in ownership for WarnerMedia, which is being acquired by Discovery awaiting regulatory permission. None of the creators of the CW, which debuted in 2006 to replace the WB and UPN, are still alive, including former CBS CEO Les Moonves, who was the driving force behind it. CBS has merged with Viacom since the CW's inception, while WarnerMedia was acquired by AT&T, who is presently selling it to Discovery.
The CW chairman and CEO Mark Pedowitz addressed "recent speculation in the press regarding The CW" in an internal message to staff on Thursday morning, hours after word of the prospective sale leaked Wednesday night.
"As many of you are aware, this transitional period in our industry has resulted in a flurry of business activity across media and content companies over the past year or so," he said. "In light of the current environment, ViacomCBS and Warner Bros. are looking into strategic options to maximize the value of their joint venture in The CW Network."
"It's too early to predict what will happen," he said.
When many projected that the CW, which appeals to young adults, would fold or shift to cable/digital early in its tenure, it has defied predictions and lasted 15 years. Because of its unique configuration, in which it is co-owned by two large studios that supply all of the network's scripted programming, the network's business model has worked. While the CW has never been lucrative on its own, it has added value to its studio parents by giving U.S. broadcast distribution for series that they can subsequently exploit globally and on streaming platforms. The Arrowverse series, Riverdale, All American, and Gossip Girl (Warner Bros) and Walker, Dynasty, and Jane the Virgin (CW) are among the prized assets the network has helped generate for its studio partners (CBS Studios).
That's why I'm hearing the most likely option is for WarnerMedia and ViacomCBS to sell a majority investment in the CW while maintaining minority ownership and continuing suppliers. Outside studios are unable to produce series for the CW under the existing format; it will be fascinating to watch whether a new majority owner changes the terms so that other studios can supply the network alongside Warner Bros TV and CBS Studios.
Pedowitz has led the CW for the past decade, broadening the network's appeal and balancing its audience with shows like the DC dramas and Riverdale, as well as crafting a digital route for the brand.
In 2011, Netflix paid $1 billion for the streaming rights to the entire CW roster, giving the network a big boost. While a number of CW titles are still available on Netflix, bringing in revenue, WarnerMedia and CBS Studios decided to cancel the deal in 2019 and instead direct the series they make for the CW to their own streaming platforms. (At first, all CW shows were directed to WarnerMedia's HBO Max, which eventually became the CW's streaming destination.)
The conclusion of the Netflix deal granted the CW in-season stacking rights to its episodes, which has been critical to the network's digital growth. The CW, an early adopter of streaming, has a solid digital operation and a large social media following, which could appeal to purchasers, including streamers, I've heard.
Pedowitz boasted in his message about the CW's plans for the year: "more original programming than ever before, this season's expansion to Saturday night, our increasing digital and streaming platforms."
The CW would be brought in line with the other broadcast networks under a Nexstar transaction, which would follow the traditional format of a network controlling its primary affiliate stations. It would take away the worry about the network's future every time the main CW affiliate organizations' contracts come up for renewal.
