Fox Wants a Bigger Piece of Streaming. Its Roku Deal Comes With a Catch

Traditional TV companies spent years watching viewers leave for streaming platforms. Rather than trying to build their way back into the game, they're increasingly buying the companies that already have an audience. FoxFOXA is the latest, with shareholders at both Fox and RokuROKU approving its $22B acquisition this week, just days after another major media deal closed.

Fox gets the green light

The vote wasn't particularly close. Fox shareholders approved the acquisition with 99.9% of votes cast, while 81.5% of Roku shares voted backed the transaction.

Once completed, Roku investors would own 27% of the combined company, leaving existing Fox shareholders with the remaining 73%.

The deal would create the third-largest player in US television, bringing Roku's streaming platform under the same roof as Fox's existing media business. Fox also owns Tubi, its free streaming service with 110M monthly active users.

The bill comes with debt

Fox is paying a substantial amount to expand its streaming reach. About $14.6B of the $22B deal will be paid in cash, adding roughly $8.3B in debt to its balance sheet.

Management expects the combination to generate around $400M in annual cost savings, although those benefits will depend on how successfully the businesses are integrated.

The original offer represented a 33.7% premium to Roku's share price before news of the transaction emerged. Fox is paying up for an established streaming platform, and the additional borrowing raises the stakes if those expected savings take longer to materialize.

Washington still gets a say

Shareholder approval clears one hurdle, but regulators could prove more difficult. The Justice Department issued a second request for information in September, extending its antitrust review of the transaction.

Fox and Roku are aiming to complete the deal in the first half of 2027, with one analysis expecting a closing early next year.

For Fox, the attraction goes beyond adding another streaming service. Its NFL broadcasting agreement runs through 2033, with an option to exit after the 2029 season. Roku would give Fox a more direct way to reach viewers as the industry continues moving away from traditional television.

That opportunity has caught Wall Street's attention. Bank of America's Jessica Reif Ehrlich upgraded Fox two notches from Underperform to Buy, citing Roku as a solution to the company's limited direct-to-consumer presence. FactSet data shows six Buy ratings, seven Holds, and one Sell.

Hollywood is buying its future

Fox isn't alone in turning to acquisitions. Paramount Skydance completed its $111B purchase of Warner Bros. Discovery on October 6, bringing together major film studios, HBO, and television networks including CNN.

Warner Bros. Discovery had spent years dealing with heavy debt and declining cable audiences. Those same pressures are reshaping the wider industry as traditional TV advertising loses ground and media companies look for ways to protect their businesses.

Both deals reflect a shift in strategy. Instead of spending years developing new platforms and attracting subscribers, established media companies are paying billions to acquire businesses with audiences already in place.

For investors, the immediate question is whether regulators will allow these combinations to proceed. The promised savings and streaming opportunities matter, but Fox still needs Washington's approval before it can put its acquisition strategy to work.