Bet on The CW Paying Off For the Network’s Parents

Fortified by superheroes, The CW has never looked more durable. Rather than just providing potential shelf space for programming created by its parent companies CBS and Warner Bros., The CW seems to be forging a stronger identity with stations and advertisers.

After a shaky start, The CW’s financial footing solidified when CBS and Warner Bros. did streaming deals in 2011 worth nearly $1 billion over four years, monetizing the network’s programming and more than covering the owners’ costs. This season’s strong launches of The Flash and Jane the Virgin gives CBS and Warner Bros. additional reasons to be supportive.

“The CW stepped out of the shadow of the larger broadcast networks this year with two of the best new series of the season,” CBS Corp. president and CEO Leslie Moonves said in a statement. “This is a network that has broadened its audience, redefined its programming voice and continues to provide a valuable affiliation brand to its stations. And for CBS, it’s been a great place to supply shows that grow into profitable content assets.”

“The CW has broadened its audience base and brought value with franchises such as Arrow and, now, The Flash,” Kevin Tsujihara, Warner Bros. chairman/CEO, said in a separate statement. “Their strong multiplatform numbers and social media presence reflect their leadership in the young demographic space, a coveted audience for marketers in any economic climate.”

Will the Netflix deals get renewed or will The CW start a streaming service like CBS and HBO? Stay tuned.

Meanwhile, questions remain about The CW’s future structure. In a research note, analyst Rich Greenfield recently wondered why Warner Bros. parent Time Warner still owns the network. “How important is The CW to Time Warner? Given the challenges facing broadcast television networks, why not seek to monetize your 50% stake in The CW? We suspect Tribune would love to gain access to The CW, as they control so many CW affiliates but have no network-level ownership.”

It was not long ago that Tribune CEO Peter Liguori, who has his own track record as a programmer, was agitating for more say in how The CW was run. “He would like to participate. He has some good ideas. He’s part of our team. Will there be some change in how The CW is structured going forward? I don’t know,” Moonves said during a recent earnings call.

But now, Liguori and Tribune are supportive of the network.

“We are very encouraged by the recent uptick in The CW ratings and the positive critical response to the new primetime lineup,” Liguori said in a statement. “In particular, [CW CEO Mark Pedowitz] has put in place a programming strategy that will help the network appeal to a wider, more inclusive audience, which is important for our stations across the country. We were glad to support the launch of the new shows through editorial and promotional initiatives, and we look forward to more continued collaboration to build upon this momentum.”


Having hot new shows is good for the ad business. After a strong start, The CW gave full-season pickups to The Flash and Jane the Virgin, making Rob Tuck’s job as executive VP for ad sales that much easier.

“This is definitely the strongest crop of new series in one fall season we’ve had, and the new shows are appealing to advertisers,” Tuck says. As a result, he says his phone is ringing with buyers seeking spots at the last minute. “I wouldn’t say it was just The Flash and Jane. It is really the whole schedule,” he adds.

The CW is trying to broaden its audience from a focus on young women, and that’s attracting advertisers in new categories, Tuck says. Quick-serve restaurants are way up and financial services business is coming in as well, he notes.

Buyers generally like how The CW is doing. “These days in television, we’re always looking for a bright spot, and the performance of these two new shows on The CW are bright spots,” says Catherine Warburton, Assembly chief investment officer.

“Having shows that people are talking about is always good. This puts them on the map,” says Billie Gold, Carat VP for programming research. But Gold notes that while The CW is up substantially with men, it’s drawing fewer female viewers, a potential problem for some current advertisers. “I’m sure they all want more spots in The Flash, but usually you’re not buying one show, you’re buying an entire network,” she says.

The CW’s ratings have always been smaller than the Big Four’s, but with fragmentation across the board, its audience is attractive, says Warburton, especially since the net was a pioneer in selling digital viewing along with its TV ratings, boosting its audience. “To us it doesn’t matter if it’s a phone, a computer, a tablet or a TV set. Our advertisers want to reach the audience and be in that environment,” she says.

Jon Lafayette

Jon has been business editor of Broadcasting+Cable since 2010. He focuses on revenue-generating activities, including advertising and distribution, as well as executive intrigue and merger and acquisition activity. Just about any story is fair game, if a dollar sign can make its way into the article. Before B+C, Jon covered the industry for TVWeek, Cable World, Electronic Media, Advertising Age and The New York Post. A native New Yorker, Jon is hiding in plain sight in the suburbs of Chicago.