Nexstar Media Group's CEO, Perry Sook, expressed optimism about The CW network's future financial performance, stating that he expects it to break even by the end of 2025.

Sook acknowledged that the advertising recession and recent Hollywood strikes have posed challenges for the network's profitability.

Nexstar's President, Michael Biard, praised the new carriage agreement between Walt Disney Co. and Charter Communications, as he believes it will benefit future content deals for Disney and other entertainment giants. Biard highlighted the appeal of offering high-profile content in a single bundle, which he believes is more attractive to consumers.

The recent agreement between Disney and Charter resulted in concessions from both parties, but it has been seen as a positive industry template for future dealings. Biard emphasized that the agreement ensured that premium programming was paid for, carried, and relaunched. He also noted that Charter's decision to shed unpopular cable networks could lead to better pricing for broadcast TV content providers like Nexstar.

Sook further discussed Nexstar's acquisition of a 75 percent stake in The CW, with Paramount and Warner Bros. Discovery each retaining a 12.5 percent holding. He mentioned that The CW had incurred losses of around $300 million when it was acquired, but Nexstar has already implemented measures to achieve approximately $100 million in annual savings and aims for profitability within three years. However, Sook acknowledged that the advertising recession and recent Hollywood strikes present challenges to reaching profitability, estimating that The CW will likely break even by the end of 2025.

Additionally, Sook mentioned that Nexstar is actively seeking new mergers and acquisitions that would complement their existing portfolio, particularly in the content space. However, they have yet to find any opportunities at a compelling price.

Given the current FCC regulations limiting the number of local TV stations they can own, Nexstar has expanded its reach through cable and The CW. The company has also invested in its cable news channel, NewsNation, which utilizes the resources of Nexstar's local TV stations to compete with larger cable news networks.

Sook also expressed optimism about the potential for increased political advertising revenue leading up to the 2024 U.S. Presidential campaign season. He reported that spending from presidential candidates has already begun in the third quarter, surpassing the timing of previous campaigns, which he sees as a positive economic indicator.

By: Robert Brooksby

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