An uncertain advertising market, coupled with writers' and actors' strikes, have impacted The CW network on its road to projected profitability by 2025, Nexstar Media Group says.
“The curve balls we have been thrown are an ad recession but also a writer’s strike,” says Perry Sook, chairman and chief executive office of Nexstar Media Group, speaking at an UBS investor event on Monday.
“We still think we will be at break even -- I don't want to say by 2025 -- I'd say in 2025,” says Sook.
Nexstar Media Group, the large TV station-based media company, has a 75% ownership interest in the broadcast network.
He adds: “The CW was losing in excess of $300 million when we took it over in our first year of operation.... We are taking in excess of $100 million of costs out of the network every year, which is how we get to a three-year path of profitability.”
In August 2022, Nexstar announced a deal to buy a 75% stake in the CW from co-owners Warner Bros. Discovery and Paramount Global, with each of those companies retaining a 12.5% interest in the broadcast network.
To take control of the CW -- at that time a network losing $300 million -- Nexstar was paid $54 million to take on that ownership, according to reports.
Overall, the TV advertising marketplace continues to improve, says Lee Ann Gliha, chief financial officer of Nexstar -- especially in the third quarter:
“We have been seeing some sequential improvement,” she says. “Our third-quarter advertising -- including The CW -- declined at a rate lower than that of the second quarter.” Projections are that the fourth quarter will continue along the same path.
Sook says while the big automotive ad category that TV stations and networks depend on has been improving all other ad categories are down.
Its three-year-old cable TV news network NewsNation, he says, has recently added 25 new advertisers.
Sook adds that for the channel's first Republican Presidential debate to be aired this Wednesday, NewsNation has sold out its ad inventory “at record rates.”