#Nexstar CEO Says The CW Will Be at Breakeven by “End of 2025”

The CW-parent Nexstar Media Group has applauded the recently-struck new carriage agreement between the Walt Disney Co. and Charter Communications as a positive for future content deals for Disney and other entertainment giants.

Nexstar president Michael Biard told the UBS Annual Global TMT Conference the new Charter bundle after the carriage deal with Walt Disney had more high-profile content in a single offering, which was more attractive to consumers. “That reaffirms our thesis, it wasn’t about being paid for premium content,” Baird argued about the carriage talks showdown that led to a blackout for pay TV customers.

That was followed by Disney and Charter striking a new agreement where the Hollywood studio giant had to make concessions, but emerged with a new pact seen as an industry template moving forward. “Premiere programming got paid and it got carried and it got relaunched,” Biard told investors.

He pointed to the Charter cable bundle shedding less popular cable networks, which ultimately will retain more subscribers by reducing churn and increasing the value of popular content retained. “Charter certainly feels reenergized around the video business post that deal. I’ve seen more advertising for Charter video in the last few months than I’ve seen in the last few years,” Biard said.

And with underperforming cable networks being jettisoned, the Nexstar exec said broadcast TV content like that offered by his company stood to secure better pricing for its carriage. “That frees up spend inside the bundle to be reallocated to folks like us that are underperforming, as opposed to overperforming, relative to the value they’re delivering,” Biard argued.

Nexstar CEO Perry Sook also addressed his company acquiring a 75 percent stake in The CW, with prior 50-50 partners Paramount and Warner Bros. Discovery each keeping a 12.5 holding. Sook recalled CW losing around $300 million when it was acquired, and Nexstar has eliminated around $100 million in annual savings with an eye to profitability within three years.

At the same time, Sook said the advertising recession and the recent dual Hollywood strikes represent headwinds to getting beyond losses at The CW. “We still think we will be at break-even … probably towards the end of 2025,” Sook predicted.

The Nexstar CEO added his company was on the lookout for new M&A deals. “We’re obviously on the look for acquisitions that would complement what we built, which would be in the content space or kind of adjacent to content. (We) haven’t found anything at a price that is compelling,” he said.

Having effectively reached the maximum number of local TV stations allowed by current FCC rules, Nexstar turned to cable and The CW to expand. The company has also invested in its cable news channel NewsNation, which features a lineup of TV news veterans and uses Nexstar’s local TV resources in a bid take on larger cable news competitors.

Sook also forecast upside for Nexstar from political advertising heading into the 2024 U.S. Presidential campaign season.

“We are starting to see spend at this point, even in the third quarter. We saw our earliest spend from the 24 presidential candidates that accelerated their first telecast day from what Hilary Clinton did when she ran. So that’s a positive economic indicator,” Sook reported.