Fox Corp.'s Lachlan Murdoch, fresh off a succession battle that cemented his role as heir apparent of his father's media empire, is now making a $22 billion bet that streaming is the company's future.
With his surprise acquisition of Roku Inc., the eldest son of Rupert Murdoch is making a career-defining move, refashioning a company that for years prioritized building up its cable-TV empire and buying sports media rights. During that time, Netflix Inc. and Google's YouTube have been gobbling up a greater share of a growing advertising market on streaming.
"This is positioning them for the next era of TV," said Matthew Condon, an analyst at Citizens JMP Securities. ALSO READ: OpenAI Acquires Ona, Bets On Smarter AI Agents For Codex The deal will make Fox a streaming distributor as well as a content company, helping insulate it for the future as cable TV subscribers continue to decline. Combined, the companies will become the third-largest player in US television by share of viewing, including Fox's sports, news and entertainment channels along with the consolidation of Tubi and the Roku Channel, according to a statement on Monday. "This transaction would push Fox to the upper end of streaming viewership," analysts at MoffettNathanson Research wrote in a note to investors. "Tubi and Roku would combine at the third-highest share of total streaming viewership" in the first quarter of 2026, narrowly edging out Walt Disney Co.'s trio of Disney+, Hulu and ESPN at 11%, according to the note. Investors frowned on the deal. Fox shares plunged 17%, a record-setting decline, to $54.76 at the close Monday in New York. Roku fell 1.9% to $140.90. Since its founding in 2002, Roku has established itself as a go-to platform for cable cord-cutters. Its ubiquitous streaming devices and branded TVs make it easy for consumers to access services like Netflix and HBO Max from one centralized home screen. The company makes most of its money distributing streaming platforms, including by adding buttons to its bespoke remotes that take viewers directly to a specific site, like Netflix, and selling digital advertising. Streamers like Hulu and Disney+ have run marketing campaigns by taking over Roku's home screen to promote a new show. Roku also has unique data based on viewer habits that can help Fox further generate more revenue from its ad inventory, according to Condon. Fox President John Nallen likened Roku to a "front door" to the streaming ecosystem, serving as a distributor of apps and also the main point through which consumers access their favorite content. The plan is to "combine two of the most powerful forces shaping the future of media"- Fox's live sports and news programming - with the rise of streaming, he said on a call with analysts. "This gets Fox's content right on their home screens." But the competition has made efforts to catch up to Roku's lead. Google has Chromecast and Samsung Electronics Co. has built its own smart TV ecosystem. Google and Amazon also have home screens that offer multiple services and Walmart Inc. bought smart-TV maker Vizio in 2024 to accelerate its advertising business. Fox has been building up its digital investments over the past few years and even has a past connection to Roku. In 2018 the company launched Fox Nation, a streaming service tailored to its Fox News channel. which has a home on Roku's devices. In 2020, Fox acquired Tubi, a free, ad-supported-streaming service after selling a 5% stake in Roku to help fund the transaction. Fox also acquired Red Seat Ventures, a direct-to-consumer network of podcasts, video shows and subscription platforms, last year. ALSO READ: 40,000 Shareholders, No Consultation: Did Jindal Poly Strike A Deal To Kill The Class Action? In August, Fox rolled out the Fox One streaming platform, which combines news, sports and entertainment content. But the product came years after the launch of other streaming services, including Peacock from Comcast Corp.'s NBC. Fox One is currently the streaming home for the English-language broadcast of the FIFA World Cup. The delay in releasing its own comprehensive streaming service helped Fox conserve cash, some of which it has spent on high-profile sports rights for entities like the National Football League, NASCAR and the World Cup. Meanwhile, Peacock has yet to turn a profit. The Roku acquisition will provide more scale for Fox in a faster-growing part of the media landscape and deliver more premium content and ad capabilities for Roku, according to analysts at MoffettNathanson. This should help Fox better compete for future sports rights, they said. Negotiations for NFL rights have already kicked off. "While Fox remains in a strong position to monetize its existing portfolio within the evolving Pay TV ecosystem, we see this Roku deal as a way to ensure the company's future as streaming overtakes traditional distribution in the years ahead," they wrote. |
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
