FOX is poised to strengthen its position in the ad-supported streaming market. The Lachlan Murdoch-led media company announced Monday that it will acquire smart TV company Roku for $22 billion, or $160 per share (about 14 percent above Roku’s current market price) in a cash-and-stock deal. The deal, expected to close next year, will combine Fox’s sports, news and entertainment programming and Tubi platform with Roku’s connected TV ecosystem and The Roku Channel. The merger would create The third largest streaming platform In the United States, according to Market chameleonenhancing Murdoch’s vision “The Next Chapter” from Fox After selling its entertainment assets to Disney in 2019.
The acquisition will also give Fox access to Roku’s more than 100 million global streaming households. This reach complements Tubi’s more than 100 million monthly active users worldwide, a reach that Fox has built since its acquisition of the platform in 2020.
In recent years, the entertainment industry has been shaped by a wave of mergers and acquisitions, from the Paramount-Skydance deal to the battle for Warner Bros. Television. Discovery between Paramount and Netflix.
Against the backdrop of the streaming wars and the continued decline of traditional cable and pay-TV subscribers, Roku represents a strategic move for Fox to remain competitive. With direct access to first-party viewer data across more than 100 million households, Fox can deliver more personalized advertising, especially as the value of live sports continues to grow. eMarketer predicts that ad spending on connected TV (CTV) will do just that Reaching $47 billion by 2028 surpassing linear TV, while Nielsen reported that both Roku and Tubi have surpassed services like Peacock and HBO Max in viewership.
According to both companies, Fox and Roku are “committed to continuing to operate Roku as an open, partner-friendly platform” and expect to maintain “ubiquitous” distribution of Fox content.
“This is a defining moment for Fox, and a natural extension of the intentional, focused strategy we have implemented for nearly a decade,” Lachlan Murdoch, Fox Corp.’s executive chairman and CEO, said in a statement.
Murdoch noted that since 2019, Fox has reoriented its business toward live news and sports, along with its 2020 acquisition of Tubi, which has grown into one of the company’s most successful live streaming businesses.
He added that this merger will “shift” the company’s scale into high-growth verticals and “result in a significant change” in its overall growth profile. Fox reported revenue of $3.99 billion in the January-March quarter, down from $4.37 billion a year earlier, with net income of $175 million. Despite the decline in ad revenue, Tubi’s revenue rose 23 percent, and total viewing time increased 19 percent, driven by its catalog of creator-driven titles and Tubi originals. Meanwhile, Roku reported revenue of $1.25 billion in the March quarter, compared to $1.02 billion a year earlier.
Roku founder, chairman and CEO Anthony Wood, who is expected to remain involved in the combined company and join Fox’s board after the deal closes, said he is “extremely proud” of what his team has built, adding that the merger with Fox “represents an extraordinary opportunity to accelerate our vision, scale faster and innovate more aggressively for viewers, partners and advertisers.”
