Jan. 6, 2022 "The CW CEO Mark Pedowitz Confirms WarnerMedia & ViacomCBS Exploring “Strategic Opportunities” As Majority Stake In Network Is Shopped With Nexstar Among Suitors – Update": Today I found this article by Nellie Andreeva on Deadline:
UPDATED with Mark Pedowitz’s comments, 7:50 AM: The CW might get a new majority owner. Fifteen years after the broadcast network’s launch, its co-parents, ViacomCBS and WarnerMedia’ Warner Bros, are considering a controlling stake sale, sources confirm to Deadline. Nexstar Media Group, which is the CW’s largest affiliate group following its acquisition of Tribune, is believed to be among interested buyers. Sources caution that conversations with multiple suitors are in exploratory stages and no deal is imminent.
The potential sale, first reported by the WSJ, comes amid an ownership change for WarnerMedia, which is being acquired by Discovery pending regulatory approval. None of the architects of the CW, which replaced the WB and UPN in 2006, are still around, most notably former CBS CEO Les Moonves, who was the driving force behind it. Since the CW’s creation, CBS merged with Viacom while WarnerMedia was acquired by AT&T which is now selling it to Discovery.
Hours after news of the potential sale broke Wednesday night, the CW chairman and CEO Mark Pedowitz on Thursday morning addressed “recent speculation in the press around The CW” in an internal memo to staff.
“As many of you are aware, over the past year or so, this transformative time in our industry has led to a series of business activity across media and content companies,” he wrote. “Given that environment right now, ViacomCBS and Warner Bros are exploring strategic opportunities to optimize the value of their joint venture in The CW Network.”
He stressed that “it’s too early to speculate what might happen.” (You can read the memo in full below the story.)
The CW, which caters to young adults, has defied expectations getting to 15 years when many had predicted that it would fold or move to cable/digital early in its run. The network’s business model has worked because of its unique setup, being co-owned by two major studios that supply all of its scripted programming. While the CW has never been profitable as a stand-alone entity, it has created value for its studio parents, providing U.S. broadcast distribution for shows that they can then exploit internationally and on streaming. Among valuable assets the CW has helped create for its studio partners are the Arrowverse series, Riverdale, All American and Gossip Girl (Warner Bros) and Walker, Dynasty and Jane the Virgin (CBS Studios).
That is hard to replicate, which is why I hear the most likely scenario would be for WarnerMedia and ViacomCBS to sell a majority stake in the CW while retaining minority ownership and remaining suppliers.
The current CW model makes it unfeasible for outside studios to produce shows for the network; it would be interesting to see if a new majority owner would change the terms so other studios can supply the network alongside Warner Bros TV and CBS Studios.
For the past decade, the CW has been run by Pedowitz who took the then-female-skewing network and broadened its appeal and balanced its audience with shows like the DC dramas and Riverdale while also forging a digital path for the brand. He also led the network’s expansion to Sunday and Saturday, making it a network that programs seven nights a week.
The CW received a major shot in the arm in 2011 when Netflix paid $1 billion for the streaming rights of the network’s entire lineup. A number of CW shows remain on Netflix, brining in fees, but in 2019 WarnerMedia and CBS Studios opted to end the agreement and instead steer the series they produce for the CW to their own streamers. (In the early going, all CW shows were steered to WarnerMedia’s HBO Max, which emerged as the streaming destination for the CW content.)
The end of the Netflix deal gave the CW in-season stacking rights to their shows, which has been key to the network growing its digital footprint. An early adopter of streaming, the CW has a formidable digital operation and outsized social media reach, which could be attractive to buyers, which could potentially include streamers, I hear.
In his memo, Pedowitz touted what is in store for the CW this year: “more original programming than ever, this season’s expansion to Saturday night, our growing digital and streaming platforms.”
A Nexstar deal would bring the CW in line with the other broadcast networks, following the traditional model of a network controlling its main affiliate stations. It would eliminate the stress over the network’s future every time the contracts with the major CW affiliate groups are up for renewal.
Here is Pedowitz’s note:
To Our Valued CW Team
I am sure you have seen the recent speculation in the press around The CW, so I wanted to take the opportunity to address this with you directly and share with you what we know.
First, as many of you are aware, over the past year or so, this transformative time in our industry has led to a series of business activity across media and content companies. Given that environment right now, ViacomCBS and Warner Bros. are exploring strategic opportunities to optimize the value of their joint venture in The CW Network.
It’s too early to speculate what might happen, but we promise to keep you updated as we learn more.
So, what does this mean for us right now? It means we must continue to do what we do best, make The CW as successful and vibrant as we have always done. We have a lot of work ahead of us – with more original programming than ever, this season’s expansion to Saturday night, our growing digital and streaming platforms – and we thrive when we come together and build The CW together.
Mark
The CW Majority Stake Sale Explored By WarnerMedia & ViacomCBS – Deadline
My opinion: You guys don't know this, but a couple of months ago I was thinking: "CW should end their network because their ratings are so low compared to ABC, CBS, NBC, and Fox."
CW's highest rated show is 1 million. Those other 4 networks lowest rated shows are 1 million.
May 12, 2022 "Upfronts 2022: The CW Downsizes As It Faces Transitional Year Amid Ownership Change & Business Strategy Shift": Today I found this article by Nellie Andreeva on Deadline:
When the dust settled after a frantic day today, the CW was left with 11 original scripted series — new and returning — on tap for next season. That is down from 19 (including Stargirl whose future is unclear) picked up for the 2021-22 season last year.
While there is contraction across the board on linear networks, the drop at the CW is significant and follows years of expansion that resulted in the network adding two extra nights of original programing on Sundays and Saturdays and also years of the CW rubber-stamping its scripted portfolio with the vast majority of series automatically returning regardless of their ratings performance.
That all came to an end this year, ahead of the CW’s pending sale to Nexstar, which is expected to close in the next few weeks. Only the strongest ratings performers made the cut, and there were a slew of cancellations, including same painful ones like veteran DC’s Legends of Tomorrow, The Vampire Diaries offshoot Legacies and freshman Naomi.
In the biggest transformation in the history of the CW since Mark Pedowitz took the reins 11 years ago and turned the fledgling female-focused CW into a gender-balanced network with a thriving superhero franchise, the net is fundamentally changing the way it operates and makes decisions.
Having functioned as an extension of its parent companies’ studios, Warner Bros. TV and CBS TV Studios, the CW’s role had been to help launch series which the two studios can exploit in streaming and international.
A number of renewals over the years were dictated by the shows’ value to the studios, not the network, which explained why the low-rated Dynasty ran for five seasons on the CW. The show, which was canceled today, was the subject of a rich deal between CBS Studios and Netflix and making money for the studio regardless of its performance on the CW.
After the CW’s sale, while Warner Bros. and Paramount are expected to retain minority stakes and continue to supply programming for it, their interests will no longer be above those of the network.
The 2019 end of WBTV and CBS Studios’ Netflix output deal for the CW programming also played a role in some of the cancellations as newer series go to HBO Max/Paramount+ and do not bring in external streaming revenue, putting more pressure on them to deliver for the studios. (The end of the Netflix pact has been beneficial for the CW, which can now monetize its shows with a full-season stack for all of but The Flash, Riverdale and All American.)
Financial considerations by studios led to the cancellation of several series, which Pedowitz probably would’ve kept on the air longer, including Legends of Tomorrow, which deserved a proper sendoff after seven seasons, Legacies, which has a devoted fan following, and In the Dark, which has been among the CW’s highest quality series. I hear the CW was willing to renew those shows but the studios behind them were not for business reasons as they try keep their slates profitable.
While the CW’s original scripted series volume is going down significantly, the network has beefed up its slate of acquired scripted programming, including Family Law, Professionals and Leonardo, on tap for next season, as well as alternative fare.
In light of the cancellations, we may no longer see marquee CW original scripted series such as Riverdale and Nancy Drew on Fridays or Sundays as was the case this season; they may be concentrated on Monday-Thursday (or possibly Sunday-Thursday). More acquired and alternative programming will likely find its way to the lower-trafficked nights and the summer where the CW had been consistently airing a few original scripted shows over the last couple of years.
There are a lot of rumors and speculation what the CW would look like under its new owners, with speculation about a potential push for more wholesome programming that appeals to middle America and questions about its future commitment to LGBT representation.
While time will tell what the CW would evolve into, for now, under Pedowitz, the network remains committed to diverse and inclusive storytelling that could push boundaries.
Heading into the CW’s new era, Pedowitz next Thursday will take the stage for the only traditional broadcast presentation this upfront as we bid farewell to the unicorn that the CW was, a broadcast net with two equal owners and a unique business model that survived way longer than anyone would’ve predicted.
Jul. 8, 2022 My opinion: I have a feeling that when the 2022-2023 TV season is over, the CW is going to close down. The shows on there will get cancelled and probably move to a streaming platform.
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