Fox Corp. is spending big to expand its streaming ambitions, buying Roku for a staggering $22 billion deal that looks set to cause ructions in the U.S. home entertainment industry.
The deal was announced Monday, and marks the latest step in Fox’s ongoing plan to become a major player in the TV streaming world. The deal will see Fox’s news, sports and entertainment shows combined with the Roku TV platform, including its streaming sticks and TVs, as well as the Roku Channel, to reach more than 100 million households in the U.S.
The deal will also allow Fox to combine Roku’s content with Tubi, which is one of the world’s best free streaming services. Fox acquired it for $440 million back in 2020.
As per the agreement, Fox will have to pay $160 per share to buy Roku, but it already has a big chunk of the money ready. It said it has secured $12 billion in loans to finance the acquisition so far, and the deal has already been approved by both its own, and Roku’s board of directors. However, it’s still subject to regulatory approval, and won’t close until early next year.
Fox CEO Lachlan Murdoch said the acquisition of Roku is a “defining moment” for the company and is a “natural extension of the deliberate and focused strategy we have been executing for nearly a decade."
“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,” he added.
Roku’s founder and CEO Anthony Wood hailed the deal too, and said he will join Fox’s board of directors as part of the agreement. He’ll also assume a new, senior-level management role within Fox’s organisation, although the exact nature of his duties was not yet revealed. “I’m incredibly proud of what our team has built, and the combination with Fox is an extraordinary opportunity to accelerate our vision, scale faster and innovate more aggressively for viewers, partners and advertisers,” he said.
The acquisition is the first major deal involving Fox since it sold its entertainment business to Disney, along with the National Geographic and FX Networks channels, back in 2017. It signifies that Fox is getting more serious about competing with streaming giants such as Netflix and Amazon Prime Video. By combining its networks with Roku, it gets another way to expand into streaming and subscriptions. Of course, Fox also gains a significant hardware business, with Roku’s streaming sticks among the world’s most popular such devices.
However, the acquisition may not be appreciated by all Roku customers, who have already voiced concerns about what it could mean on forums such as Reddit.
One user said that their Roku device has been pushing ads for Fox News and other channels for some time, which suggests that the development has been in the works for a while. “Time for a new streaming stick,” the user said.
But it’s not only the ads that are worrying users. Fox News is notoriously conservative and has a highly-charged political agenda. Some users fear that the ubiquity of Fox News will surely escalate on Roku’s operating system, and they believe that the company will undoubtedly use the platform to “show their propaganda and misinformation more and more by defaulting users to Fox News”.
