Fox Corporation will acquire Roku in a deal that values Roku at around $22 billion. The transaction will combine the sports, news, and entertainment programming of Fox, plus the Tubi online service, with the Roku platform, which has more than 100 million active households.
The companies say it will create a scaled next-generation media and technology company positioned at the intersection of two of the most important forces reshaping video consumption: the enduring primacy of live sports and news, and the continued rise of online video.
They say they are committed to continuing to operate Roku as an open, partner-friendly platform and to the continued ubiquitous distribution of Fox programming.
Fox previously acquired Tubi in 2020 as a standalone online video service, supported by advertising and available across multiple devices.
“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 Lachlan Murdoch, the chief executive of Fox Corporation. “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.”
Anthony Wood, the founder and chief executive of Roku, said: “Over the past two decades, we’ve built Roku into the leading TV streaming platform, reaching more than 100 million households globally and reshaping how people discover and enjoy entertainment. 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.”
With this transaction, Fox is buying its way into online distribution, with an established user interface and operating system available on millions of devices and displays.
It is a platform that carries competitors like Netflix and Disney. The obvious question is not whether Fox will favour its own services, but how it demonstrates that it does not.
Between them, Tube and the Roku channel command over 5% of all television viewing in the United States, with Fox accounting for over 7%. The combined company will become the third-largest player by share of viewing in the United States.
The deal, which is subject to regulatory approval and closing conditions, would give existing Fox shareholders around 73% of the combined company, with Roku shareholders having 27%.
Anthony Wood, a pioneer of the digital video recorder, founded Roku in 2002. He was hired by Netflix to develop an online video product, but it was never launched. Netflix transferred the project to Roku and took a 15% equity stake in the company. Roku launched a project, originally known as the Netflix Player. As demand grew, Roku added support for other services, like Hulu and Amazon Prime. Within six years, the company sold more than 10 million devices and now has over 100 million active accounts around the world.
He will continue to have a role in the combined company and will join the Fox board of directors.