Nexstar Acquires 75% of The CW; Management Projects Profitability by 2025

Nexstar announced that it finalized an agreement to acquire 75% of The CW Network from Paramount and Warner Bros. Discovery, which will each continue to hold 12.5% of the “mini” national broadcaster. Nexstar will not pay any consideration for its stake but will take on its allocation of the network’s future losses that are rumored to run around $100 million annually. The deal is expected to close in the third quarter with no regulatory approval required, and Nexstar will take over operational control immediately. Since no financial data was provided, we are holding off on updating our model and maintaining our $195 fair value estimate.