Recently Nexstar bought a majority control of The CW, and now they have announced that there will be changes. These changes relate to how contracts for local The CW affiliates are negotiated with live TV streaming services like Hulu, DIRECTV STREAM, YouTube TV, and more.
This week Nexstar Media Group’s Chairman and CEO Perry Sook spoke at the JPMorgan 51st Annual Global Technology, Media, and Communications Conference in Boston. During that talk, he announced that The CW will no longer be forcing affiliates to agree to the national deal reached by The CW. Instead, local The CW Affiliates will be able to strike their own deals with local affiliates.
“We, as the owner of The CW, are constructing a new affiliation agreement template that is going to allow affiliates to opt-out of The CW deal with the virtual MVPD and cut their own deal — or they can opt in to the deal that we have already established for them. But larger companies are going to opt out, because they have other business to do with the virtual MVPDs. The smaller companies are going to say I can’t do as well on my own — going back to the comment I made earlier about distribution — negotiations are all about scale and leverage,” Perry Sook said during his talk, according to TVNewsCheck.
This is a return to the old system where many small owners of local stations need to strike deals with each streaming service if they want. In the past, this resulted in many local TV stations not being included on live TV streaming services and we may also see more blackouts as locals fight with streaming services.
Recently many local stations have given the parent companies of networks like CBS the ability to negotiate on their behalf. This helped to avoid the need for a long list of small deals to be reached with live TV streaming services.
Nexstar is hoping this will set a trend away from massive deals to smaller deals. “We can’t advocate for this and then put our network hat on and say, not so fast. Will other networks follow The CW’s lead? We are hopeful,” the Nexstar CEO told the investor conference.
It is unknown how many local The CW affiliates will move to make their own deals, but recently, CBS’s deal with Fubo upset many locals. This resulted in many local CBS affiliates being replaced with a national feed on Fubo until a new deal was reached.
As cord cutting matures, how networks deal with live TV streaming services is also changing. For now, we will have to see if the move to single large deals made by companies like Paramount will continue or if we will return to each owner having to make their own deals.