New York (AFP) – Fox Corporation will acquire streaming platform provider Roku in a cash and stock deal worth $22 billion, the companies announced Monday. Fox executives said the transaction would give it “first-party data” and insight on Roku’s more than 100 million global subscribers, an attribute Roku has parlayed into advertising revenue growth. The deal deepens Fox’s exposure to the hardware of the streaming business, diversifying away from the legacy cable broadcast universe where the media giant’s mix of politically conservative news telecasts and blockbuster sports games have made it a dominant player.
“This is a defining moment for Fox, and a natural extension of the deliberate and focused strategy we have been executing for nearly a decade,” said Fox Chief Executive Lachlan Murdoch. “Today, we take the next step: bringing together the most valuable live content portfolio in video consumption with the preeminent streaming platform through which America watches it.”
But shares of Fox sank more than 15 percent near midday Monday, a drop analysts said reflected concerns about the deal’s dilutive impact on existing equity as well as strategic questions about the deal. Roku shareholders would receive cash and Fox stock under the deal valued at $160 per share, a joint press release said, with the transaction expected to close in the first half of 2027. Roku shares have traded between about $90 and $130 since late April.
California-based Roku rose to prominence in the early days of streaming with its plug-in devices and is now a major player in smart TV operating systems, earning the vast majority of its revenue from advertising and other platform-related services. It also has its own advertising-supported streaming channel, a competitor to Fox’s Tubi. Roku generated $4.7 billion in revenue in 2025, with approximately $88 million in profit.
Murdoch — who was handed control of his father Rupert Murdoch’s media empire in 2023 — told analysts on a conference call that the current expectation is to keep Tubi and Roku as separate platforms. While there is about a one-third overlap in the audience of Roku and Tubi, “they serve consumers and their viewers in different ways,” Murdoch said.
Streaming media analyst Dan Rayburn said the Roku infrastructure will bring Fox valuable intelligence on a large portion of viewers in terms of what people are watching, how they are watching and “what are they wanting to pay for?” he said. Beyond that, Fox will also benefit from Roku’s distribution system. Rayburn noted that Fox has not disclosed viewership figures at Fox One, suggesting limited reach thus far.
Emarketer analyst Ross Benes also saw logic in the deal. “It remains to be seen how well the combination of a digitally innovating streaming company will mesh with a media conglomerate rooted in legacy assets,” Benes said. “But the strategy makes sense and it jibes with the continual consolidation that’s occurring in streaming.”
A note from Briefing.com alluded to Roku’s 100 million subscribers as a selling point, but said the weakness in Fox shares Monday shows “investors are also focused on dilution, leverage, integration risk, and whether Fox can preserve Roku’s partner-friendly neutrality while owning a gatekeeper platform.” Shares of Fox slumped 15.1 percent while Roku dipped 0.9 percent.
© 2024 AFP
