Fox buys Roku in $22bn streaming bet as shares fall

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Fox buys Roku in $22bn bet

Highlights

Fox will acquire Roku for an enterprise value of $22 billion, offering $160 per Roku share in cash and Fox stock.
Fox shares dropped nearly 20% after the deal announcement, as investors expressed concern over the high price and strategic risks.
The acquisition leaves Fox with net debt nearly three times EBITDA and raises competitive tensions given Roku's previous neutrality as a streaming platform.

Deal reshapes Fox streaming strategy

As reported by Financial Times, Fox says it will acquire Roku for an enterprise value of $22 billion, in a move that marks a sharp break from the Murdoch family’s longstanding aversion to large and expensive transactions. The company’s shares fall nearly a fifth after the deal is announced, reflecting investor concern over the price and strategic risks.

Fox is offering Roku shareholders $160 in a mix of cash and Fox stock for each share. Roku is best known for its streaming device that plugs into smart TVs, but most of its revenue comes from advertising and subscriptions sold through its user interface, including services such as HBO Max.

The valuation stands out because Roku expects free cash flow to reach $1 billion only two years from now. Even so, the acquisition gives Fox a much larger direct presence in streaming than its smaller Tubi platform currently provides.

Debt burden and competitive tensions come into focus

Fox’s move comes as the U.S. cable and satellite television base continues to shrink after more than halving over the past 15 years to about 50 million subscriptions. Those legacy operations remain highly profitable, with Fox expected to generate roughly $2.5 billion in free cash flow in 2026, but the steady erosion of linear TV audiences is increasing pressure to secure a stronger digital position.

The deal also creates new complications. Roku has acted as a neutral distribution platform for a wide range of streaming services, and competitors may be less willing to rely on a platform owned by Fox. At the same time, the cash element of the acquisition leaves Fox with net debt of nearly three times EBITDA, a level that remains manageable but could reduce flexibility when competing with Apple and Amazon for premium content such as future American football rights.

Investors may conclude that Fox is paying heavily for scale without fully resolving its core structural challenge in streaming. Still, the company retains the other pillars of its business, including Fox News and live sports, and the deal could strengthen both if Roku helps preserve audience reach as traditional television contracts.

In our earlier coverage of Fox’s $22 billion agreement to acquire Roku, we outlined the key terms of the $160-per-share cash-and-stock offer and the rationale of expanding Fox’s streaming reach alongside its sports and news assets. We also noted plans to integrate Roku with properties like Tubi, expectations for cost synergies and cash-flow accretion, and the market’s cautious response as Fox shares fell after the announcement.

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