On the surface this looks like a bad idea, Nextstar would take on $100 million of CW debt. This will give them 75% Stake. Since its creation, the CW has never turned a profit. So why would any one want it? Simple. Local Broadcasting rights. Nextstar owns the most local stations out of the big three companies. (if you didnt know, all local stations are owned by a giant corporation even if they are claiming they are some small channel, its a lie. the only ones that are “local” are your access channels.)
So how do you make back $100 million from a channel that has never made a profit? You increase the fees you charge the TV providers. This year Sinclair increased their prices by 1 billion dollars for local broadcasting for Dish network alone, after settling with Direct tv and Comcast For around 300million each. (the total is behind closed doors but i have friends that work there and that was a 50% increase in their normal fee and they are pretty sure thats the number they got) I worked for dish when they came and strong armed us, We only got the local channels back 1 day before the superbowl. they didnt get the full 1 billion. but 300 million was also the number we heard around the office.
Nextstar has raised its prices every time contracts expire. You ever wonder why you have to pay for local channels? Thats why. If this deal goes through, and you still have paid tv, get ready, they hit the service providers one by one, and they will take all their channels down at once until the service provider caves.
Just thought i would save my old co-workers some ear screeching phone calls when the locals go down next year for the extortion. When you see the crawl on your local station crying about how they are a local channel getting bullied by the big providers, Its a lie. Local broadcasters dont pay providers to be on their network, they charge hundreds of millions because they own so many channels.
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