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BFD Expert Voices - Media Deals

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The CW plans to be opportunistic about growing its sports business as the cable business shrinks, its president Dennis Miller tells Tim.

Why it matters: Sports programming has become an unexpected lynchpin in parent company Nexstar's quest to make the network profitable for the first time.

State of play: Sports has led the network's reinvention in the 18 months since Nexstar acquired it.

Much of The CW's sports programming airs on Saturdays in time slots that used to feature paid advertising and religious-themed programming. By 2025, The CW will have 500 hours of sports programming, according to the network.

It tees off on the second year of its deal with LIV Golf next month. The CW holds a one-year option for next year, though the future of the Saudi-backed league is uncertain.

"We had had an opportunistic situation with LIV, where they were looking for distribution and we were looking to kickstart with an announcement that we were willing to take chances and put on some quality professional golf," Miller says. "Once that happened, the phone started ringing."

Since the LIV deal, The CW has started airing ACC Conference football and basketball games, and the long-running NFL series "Inside the NFL." It has upcoming deals with the WWE and NASCAR.

What's next: Miller, like many other broadcast executives, sees an opportunity in local sports with the decline of the RSN business.

"We have ongoing conversations with individual teams and with all of the leagues about what makes sense going forward," Miller says. "There's still a delta between the very rich deals that were made in the RSN days and what is appropriate pricing in today's market."

Additionally, Miller wants to add sports that could air on Sundays and in other primetime slots.

"Maybe we can carve out some partnership deals with some of our other Big Four partners," Miller continued. "We wouldn't mind controlling our destiny and creating some sports events that are all CW-proprietary."

Zoom out: Miller is betting that broadcast television only becomes more important as the cable industry dwindles.

The number of pay-TV subscriptions continues to shrink. YouTube TV is now one of the top distributors. But broadcast television is not inextricably tied to the pay-TV bundle in the same way as cable.

"It's still this very lucrative, profitable marketing platform for all types of IP, and local news isn't going away. It's got a preferred status in the regulatory environment because of its importance for the local community," Miller says.

1 big thing: Growing The CW with sports

Photo illustration of Dennis Miller surrounded by abstract shapes.

Photo illustration: Gabriella Turrisi/Axios. Photo: Courtesy of The CW

Candle Media, the Blackstone-backed media rollup led by former Disney executives, has hired Moelis to help the company seek deals, Kerry writes. 

Why it's the BFD: The appointment of the eponymous M&A advisory firm likely indicates that Candle has some big plans ahead, albeit unclear what at the moment. 

Zoom in: Candle hired Moelis "to explore specific potential acquisitions in the live action content space in order to give the company greater scale and operating efficiencies," a spokesperson tells Axios. 

That's "the only reason" the firm was hired, the spokesperson said, rejecting the original Puck report that the move is tied to financial turmoil at Reese Witherspoon's production company, Hello Sunshine, which is part of Candle.

Hello Sunshine was on track to deliver only 10% of its expected profit in 2023, Bloomberg reported. Candle acquired the company in 2021 for $900 million, a hefty price paid before the studio strikes and streaming struggles sent valuations tumbling.

Catch up quick: Candle, led by former Disney executives Tom Staggs and Kevin Mayer, closed a series of acquisitions from 2021 to 2022. It addition to Hello Sunshine, it acquired CoComelon creator Moonbug Entertainment in 2021.

In 2022, it bought a 10% stake in Will Smith and Jada Pinkett Smith's entertainment company, Westbrook. It then acquired Faraway Road Productions, ATTN:, Exile Content Studio and NFT startup Notables. 

Last year, it hired former ABC News president James Goldston to lead a new, nonfiction production studio.

Candle Media hires Moelis & Co

2. The BFD: Candle lights up new M&A talk

Illustration of film clapper with question marks

Go deeper in our full database in the Axios Pro Deals Tracker.

• 🎵 Bolero, a French music rights royalties marketplace, raised €2m in seed funding led by XVC Tech. https://axios.link/3T0jFk6

• KKR is in advanced talks to buy Broadcom's (Nasdaq: AVGO) remote access unit for $3.8b, per Reuters. https://axios.link/49vjDHY

• 🎵 Universal Music Group acquired a majority stake in Mavin Global, a Nigerian music label focused on Afrobeats artists. https://axios.link/4bL5Put

• Canal+ Group, the Vivendi-owned French conglomerate, increased its stake in Viu, the Asian streaming platform, to 30% for $300m, up from 26.1% last year. https://axios.link/49vi0da

• Kinnevik agreed to sell a 19.8% stake in listed Swedish telco Tele2 AB to French billionaire Xavier Niel for around $1.3b. https://axios.link/3URDf4k

3. Deal flow

• Courtney Cunniff joined Black Bear as SVP of film. She was previously VP of production and development and acquisitions for film titles for eOne and Hasbro. https://axios.link/3IdhmVz

• Cord Cutters News laid off several employees including EIC Roger Cheng. https://axios.link/42R2XrI

4. Movin' on up (or out)

🇰🇷 Hollywood's streaming malaise infects South Korea, Asia's TV capital (Bloomberg)

"Wavve and Tving are now discussing a merger that their owners and the government hope will give them enough scale to better compete with Netflix. The merger would create one service with shows from all the biggest local studios and three major broadcasting stations," Sohee Kim reports.

👀 Walmart is acquiring Vizio. Now what? (Lowpass)

"There's another part to this deal that hasn't gotten a lot of attention: Vizio's data business, and how it may change once Walmart takes ownership of the company. ... Among the companies licensing this type of data is Nielsen, which relies on it to measure TV consumption in the age of streaming," Janko Roettgers reports.

🪦 When media outlets shutter, why are the websites wiped, too? (Slate)

"There are innumerable problems with maintaining the original website—links, code scripts, and ad networks can quickly present security risks if not properly monitored and maintained," Scott Nover writes.

5. Channel surfing

an illustration of a television that says "channel surfing" on the screen being held up by hands on a dark smoky background

📺 Situational awareness: "Vizio is at heart a media company masquerading as a manufacturer," Axios' Felix Salmon writes.

@kerrymflynn: "Drive-Away Dolls" at AMC Theatres. Loved the cast, plot and script. But I think this 84-minute film could have been even shorter. 

✏️ Thanks to Michael Flaherty for editing and Katie Lewis for copy editing this newsletter.

Thank you for reading Axios Pro Media Deals! Please ask your friends, colleagues and The CW viewers to sign up.

February 26, 2024

1 big thing: Growing The CW with sports