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

Traditional TV companies spent years watching viewers move to streaming, and now they're buying the audiences they lost. FoxFOXA and RokuROKU shareholders approved a $22B takeover this week, clearing a major hurdle for the deal. But shareholder approval only gets them so far, with antitrust regulators still needing to sign off.

Built or bought: Fox is paying $22B for Roku, but the real prize is a direct connection to viewers who have moved away from cable. Bringing Roku alongside Tubi would make Fox the third-largest player in US television, giving it more ways to reach audiences without relying on traditional networks. For investors, the appeal is clear, though the price raises questions about how much that reach is actually worth.

• Roku investors would own 27% of the combined company, with existing Fox shareholders retaining the remaining 73%.
• Fox's NFL broadcast deal runs through 2033, but an option to exit after 2029 makes Roku's established streaming audience especially valuable.

The Bill Arrives in Cash

Fox is paying a hefty price to expand its streaming business, with the deal adding roughly $8.3B in debt to its balance sheet. Management expects $400M in annual savings from combining the businesses, but making those numbers work is only part of the challenge. The Justice Department requested additional information in September, extending its antitrust review and leaving the deal's planned 2027 closing dependent on regulatory approval.

• Bank of America's Jessica Reif Ehrlich upgraded FoxFOXA two notches from Underperform to Buy, citing Roku's potential to strengthen its streaming business.

• Wall Street remains divided on the deal's upside, with six Buy ratings, seven Holds, and one Sell, according to FactSet.

Hollywood's dealmaking spree: Fox isn't the only one reaching for its checkbook. Paramount Skydance completed its $111B acquisition of Warner Bros. Discovery on October 6, bringing HBO, CNN, and major film studios under one roof. It's another enormous bet in an industry where cable's decline has made standing still increasingly difficult. The studios may be getting bigger, but that doesn't mean their problems are getting any smaller.

The S&P 500's Bear Market Hides in 40% of Its Stocks

Every bull market keeps a few skeletons in the closet, but this one is getting hard to ignore. As the S&P 500 hovers near its October high, nearly 40% of its members (opens in a new tab) sit in a bear market. Contrarians are rummaging for value plays, and analysts say a few of the fallen can rise again.

• Those members total 191 stocks — only 10 have “buy” ratings from at least 80% of analysts and sales growth forecast at triple the index’s pace.
• OracleORCL leads that shortlist, with analysts eyeing 81% upside — ahead of MicronMU at 73% and BroadcomAVGO at 54%.

Spreading out: A lopsided rally can still even out. Bank of America strategists say this month’s drop in bond yields should lift more stocks across the market in the year’s final quarter. The bank sees real estate, small caps, and consumer discretionary as “peak yield” winners. Tech could benefit too, but fund managers are already overweight the sector. When the whole room fears the same bubble, the quieter corners of the market get a second look.