Fox is apparently serious about streaming entertainment.
They proved that this morning by buying one of the largest streaming platforms in the world, Roku, for $22 billion. That works out to $160 a share, in a combination of cash and Fox Class A common stock. Both Fox and Roku expect the deal to close in the first half of next year.
Fox now has a new, potent medium to stream its vast content offerings. With Roku’s internet-powered connected TV platform, Fox can now stream its news, sports, weather, and entertainment content to more than 100 million households.
It also owns the Tubi streaming service, which will likely have a role in the new Fox-owned Roku.
Although Fox will be the owner of 24-year-old Roku, both companies say the streamer, which has a reputation for being open to different content providers, will stay that way. Fox will also continue using its current distribution lineup (broadcast stations, cable/streaming partners) in addition to Roku to distribute its content.
“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 Laclan Murdoch, executive chairman and CEO of Fox, in a statement. “This combination will transform the scope of our company into high-growth verticals and yield a step change in our overall growth profile.”
Anthony Wood, the founder, chairman, and CEO of Roku, who will join the Fox board and will stay on with the company, added, “After concluding its strategic review process that this transaction offers a significant premium to Roku shareholders while also providing them with the opportunity to participate in the compelling future upside of the combined company. I couldn’t be more excited about what we’ll accomplish together.”
The acquisition could give Fox some leverage over other cable and streamers in carriage disputes. Fox now has ready access to 100 million subscribers nationally, in case a dispute leads to Fox content being dropped by competing cable and streaming services.
Locally, Fox, though it’s subsidiary, Fox Television Stations, Inc., owns WAGA-TV Fox 5. The station is already available on Roku through its Fox Local app. It is not known at this time if this new deal means more Fox 5 content on the streamer, although that information should be forthcoming.
