Greetings, and welcome to Nexstar Media Group conference call. At this time, all participants are in a listen-only mode. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Joe Jaffoni, Investor Relations. Thank you. You may begin.
Thank you, operator. Good morning, everyone, and thank you for joining the Nexstar Media Group conference call this morning. I'll read the safe harbor language, and then we'll get into the prepared remarks. All statements and comments, including financial estimates and statements as to the expected timing, completion and effects of the acquisition by Nexstar of the CW Network made by management during today's conference call, other than statements of historical fact, may be deemed forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995. Nexstar cautions that these forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those reflected by the forward-looking statements made during today's call.
For additional details on these risks and uncertainties, please see Nexstar's annual report on Form 10-K for the year ended December 31st, 2021, as filed with the Securities and Exchange Commission and Nexstar's subsequent public filings with the SEC. Nexstar undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. A presentation is available on Nexstar's website, www.nexstar.tv, in the Events and Presentation section, which management will review on today's call. Nexstar's forward-looking statements policy can be found on page two of the presentation, along with reference materials that may be filed with the Securities and Exchange Commission. Nexstar encourages you to read these materials as they are filed because they will contain important information about the transaction.
Today's call will not include a Q and A session, though management will be available after the call for any follow-up questions. With that, it's now my pleasure to turn the call over to your host, Nexstar Chairman and CEO, Perry Sook. Perry, please go ahead.
Thank you, Joseph, and good morning, everyone. Thank you all for joining us to discuss Nexstar's acquisition of a majority stake in The CW Network. With me today are Tom Carter, our President and COO, as well as Lee Ann Gliha, our CFO. Since the media's first reported Nexstar's interest in acquiring The CW, investors have continued to express a high level of interest in the subject. While we typically wouldn't host a conference call for a transaction of this size, we believe that due to the interest, it's in the best interest of all of our shareholders and consistent with Nexstar's long-held commitment to transparency and good disclosure that we do so. As noted in this morning's press release, under the terms of the agreement, Nexstar will acquire a 75% ownership interest in The CW for no upfront consideration. Warner Bros.
Discovery and Paramount Global, the current co-owners of The CW, will each retain a 12.5% ownership interest in the network and will continue to produce original scripted content primarily for the 2022-2023 broadcast season. On the call today, we will briefly touch on the strategic and operating benefits of the transaction, as well as the transaction's terms and other financial details. From our perspective, the transaction possesses many of the common core principles underlying Nexstar's historic approach to M&A. Mainly, it enhances our revenue opportunities and competitive position by expanding and diversifying the assets, content, and capabilities of our scaled media platforms. Over the years, Nexstar's M&A has been the biggest creator of value for our shareholders, and this transaction will again leverage our well-established track record of success in improving the performance and the profitability of the acquired assets.
If we realize our vision, it will become among the most accretive acquisitions that we have done. While the acquisition of the CW Network does not rise to the level of financial materiality for Nexstar, we believe it's strategically important for our business for a number of reasons. First, Nexstar's ownership of the CW solidifies and creates better revenue opportunities for Nexstar's CW stations as well as other CW affiliates. Nexstar, together with its partner stations, is the largest CW affiliate group with 37 CW and CW+ affiliates, reaching 32% of all U.S. television households, including five of the top 10 DMAs. Together, these stations are some of the most profitable and highest margin television assets in our portfolio.
As the network's majority owner, Nexstar will make business decisions that will enrich these revenue streams while ensuring the viability and future financial success of the broadcast network. As Tom will cover in more detail, our strategies to improve The CW's programming and ratings will create new opportunities for CW-affiliated stations to enhance their retransmission and local advertising revenue. Second, it diversifies Nexstar original content portfolio. Nexstar produces over 290,000 hours of original video content every year, the majority of which today is local and national news. This transaction will increase our mix of non-news content, further diversifying our revenue streams and strengthening the appeal of our combined offering to advertisers. Third, it established Nexstar as a participant in an advertising-based video-on-demand or AVOD service.
The CW app is available on all major platforms with almost 90 million app downloads and over 3 billion digital impressions served for the current broadcast season through the end of June. We will continue to grow this platform by adding content with the potential to leverage Nexstar's content and other programming assets. Fourth, this transaction positions Nexstar to have an important seat at the table regarding any potential future changes in the network affiliate ecosystem. Owning proprietary network content provides us with additional negotiating leverage and monetization opportunities for our stations. Fifth, it increases our exposure to the large and lucrative national advertising market. The CW almost exclusively sells its advertising nationally. The transaction enhances our existing national advertising revenues and presents Nexstar additional opportunities to bundle and/or separately market our network inventory with our local inventory, given the near nationwide reach of our television assets.
Finally, we will have the opportunity to create new and potentially meaningful value for The CW by improving its profitability. We will apply the same strict financial standards to operating The CW as we apply to our other businesses. Nexstar has the scale, management expertise, financial capacity, and operating and integration strategies to transform The CW in a manner that we believe will significantly improve its profitability while extending Nexstar's long-term record of shareholder value creation well into the future. In summary, our acquisition of The CW Network is strategically and operationally compelling, as it will enable us to leverage our operational expertise to improve the network's performance through our management of this important national platform.
Nexstar's powerful, diversified platform produces and distributes some of the most compelling local and national news, sports, and entertainment content in America, and we believe The CW Network will provide a very complementary asset that will enhance the overall attractiveness and value proposition of our content offerings to advertisers and distribution partners. With that, now let me turn the call over to Tom Carter to provide some additional details on our operating strategy and our plans. Tom?
Thanks, Perry, and good morning, everybody. I'm excited to join Perry and Lee Ann, our investors and analysts, to discuss our plans to again build new value through thoughtful strategic M&A. As you'd expect from Nexstar, our first goal is to improve the profitability of The CW and more fully realize on its potential as a broad reach entertainment provider and marketing solutions platform. We'll do so by implementing synergies and applying Nexstar's fiscally responsible operating focus to the network. We believe under our controlling ownership, The CW will benefit from our focus, nimbleness and operating rigor. In the near term, Nexstar can leverage its infrastructure to reduce costs in areas such as corporate overhead, digital infrastructure, advertising sales, and content and programming acquisition at The CW.
While reducing costs is one path to improving profitability, there is significant opportunity for value creation by focusing on and building the broadcast audience and driving new revenue. As the largest local broadcasting company in America with significant programming acquisition and network experience, our approach will be unlike other broadcast network owners and The CW's predecessor owners as we will strive to grow the broadcast audience without a dual agenda of green lighting programming capable of crossing over to an SVOD service. We will make decisions for the broadcast network based on what's best for the broadcast audience, which we believe will strengthen ratings, drive increased advertising revenue and affiliation fees, and create new revenue opportunities. When combined with our synergy cost savings and efficiency initiatives, we believe this strategy will create a foundation for new levels of profitability for the network.
As many of you are aware, the CW is currently the lowest-rated network, broadcast network, which we believe largely reflects the fact that its programming is targeted for an 18-34 audience demographic, while the average age of the CW broadcast viewer is 58 years. Over time, we will be taking a different approach to our CW programming strategy, and we will leverage our experience in spending approximately $2 billion a year on programming, attracting and monetizing viewers, as well as our experience transitioning NewsNation, our national cable news network from WGN America, while maintaining a strict focus on cash flow. Given the early media coverage of this transaction, we are already receiving a number of inbound opportunities to source cost-effective content. We will also reduce costs by increasing the mix of lower unscripted costs and high-quality syndicated programming appealing to a broadcast audience.
A departure from the prior predominant focus on expensive original scripted content, which is uncommon among major broadcast networks. According to SNL Kagan, the percentage of the CW programming spend dedicated to original programming is almost twice that of the average amount of other broadcast networks. We reviewed our planned operating strategy with our partners, Paramount Global and Warner Bros. Discovery, and our partnership will result in them continuing to provide content, transition services, and capital as the Nexstar-led CW can drive value for their collective 25% ownership. Reflecting our partnership, they will produce original scripted content primarily for the CW's 2022/2023 broadcast season, and Nexstar will have the option to extend this programming partnership into the future for additional content if mutually agreeable.
The CW's prime time programming is also available for streaming for free without authentication on its wholly owned ad-supported website, cwtv.com, as well as the CW app, which is now available on every major OTT platform and which counts almost 90 million downloads. Nexstar believes it can enhance and grow the CW's existing digital assets and platforms through content expansion, including the potential to leverage other Nexstar programming and content. Let me now turn it over to Lee Ann Gliha to touch on some of the financial considerations of the transaction. Lee Ann Gliha?
Thank you, Tom, and good morning, everyone. Let me run through some financial and deal points. From a housekeeping perspective, The CW will be 75% owned by Nexstar Media Inc., a wholly owned subsidiary of Nexstar Media Group, Inc., and will be designated as an unrestricted subsidiary under our debt agreements.
This transaction requires no regulatory approvals, and we expect it to close in the third quarter, but we will begin managing the business immediately. Nexstar will obtain its 75% stake for no consideration and will share in the pro forma allocation of The CW's financial results going forward. The financial results of The CW will be consolidated with Nexstar's results. The transaction will be accretive for Nexstar based on the protection it affords our existing CW-related cash flows with upside opportunity as we turn the network around. It's no secret that The CW is not profitable, but this is not typical for fully distributed broadcast or cable networks. In fact, according to SNL Kagan data, no other broadcast network operates at an ongoing loss.
Based on our plans, we believe we can bring The CW to profitability by 2025, and we expect at least a low nine-figure amount over this three-year period. I'll now turn the call back to Perry. If investors or analysts have questions, please reach out. Perry?
Thank you, Tom and Lee Ann. Our transaction to acquire a majority stake in The CW Network will enable us to leverage our significant programming acquisition experience and acquisition integration and synergy realization track record to improve the network's financial performance through our control, management, and operation of this powerfully, fully distributed national platform, as well as The CW's very successful ad-supported streaming app. We'll benefit as the nation's largest CW station group and from our broadcast first approach to managing the network for viewers, advertisers, affiliates, and of course, cash flow. Just to be clear, today's announcement will not affect our return of capital plans to shareholders by one iota. Speaking on behalf of Tom, Lee Ann, and the board, we're delighted to have negotiated and structured this unique transaction.
Our long-term acquisition strategies and operating disciplines, combined with the prudent management of our capital structure, have been a proven formula for sustained long-term growth and shareholder value and appreciation, and we look forward to extending this track record of success. Thank you all for joining us this morning. That concludes our call. Thank you for listening.
Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time, and have a wonderful day.