In a major shakeup for the streaming TV industry, Fox Corp. on Monday announced plans to acquire CTV streaming device and TVOS provider Roku in a cash and stock deal that places a $22 billion enterprise value on the company.
The transaction, which values Roku at $160 per share, was unanimously approved by Roku’s board and is expected to close in the first half of 2027. It still needs approvals from Fox and Roku shareholders, as well as regulators. After close, Fox shareholders are expected to own around 73% of the combined company and Roku shareholders 27%.
Roku CEO and founder Anthony Wood will continue to play a role at the combined company and join the Fox Board of Directors once the transaction is complete.
The deal marks a major development for Roku as well as a significant move for Fox and could have implications for the broader media and connected TV ecosystem at large.
With Roku, the media company would own the CTV streaming devices and operating system that serves content and has direct relationships to Roku’s existing 100 million U.S. streaming households, alongside first-party data and FAST service The Roku Channel.
In terms of content and streaming services, Fox is poised to have a much larger foothold in the digital space, alongside its existing and relatively still strong position in traditional linear pay TV with sports and news programming across national and local channels including major sports rights like NFL, MLB, NASCAR, and FIFA World Cup, among others.
Fox further leaned into streaming with last year’s launch of the flagship DTC Fox One service and has been courting younger viewers and fandom-focused content through its popular free AVOD streamer Tubi.
With Roku, those would come under the same roof as leading linear free streaming TV or FAST service, the Roku Channel – which is built-in to the Roku TVOS as well as available as an app.
Both Tubi and the Roku Channel have grown to regularly capture leading respective shares of monthly U.S. TV time among free streamers and outpacing some major paid SVODs on Nielsen’s The Gauge. In March, the Roku Channel garnered a 3% share, ahead of Tubi at 2.2% that month.
Roku also brings low-cost skinny virtual MVPD Frndly that it acquired and the $3 per month ad-free Howdy SVOD that has already attracted an estimated 1 million signups in the first eight months since its launch last August.
Roku and Fox One most recently teamed up with latter joining the platform as a premium subscription partner in May and working together to promote content within Roku’s dedicated Soccer Zone content hub during the World Cup tournament.
Owning TV’s entry point, experience
While a content and service footprint that spans modes and models, including pay TV, broadcast and streaming, hold potential for Fox, perhaps the most significant aspect of the deal is the position Fox would wield in owning the TV operating system that decides the user experience and serves as the entry point to TV viewing across Roku’s existing 100 million U.S. streaming households.
As TVREV’s Alan Wolk laid out in this recent column, the TVOS wars are potentially bigger and more key than the so-called streaming wars themselves.
Per the analyst, that’s because business dynamics and models in the TV media ecosystem have changed and the TVOS has emerged as a significant place of influence – with those that control it not only shaping the user experience but in doing such, deciding which content and apps are surfaced first and in preferred placements to aid discovery when viewers turn on their TV sets, drive consumption and engagement, and in turn generate revenue be it advertising or subscription.
“[The OS] is the front door to television. It is the first thing viewers see when they turn on the set and, increasingly, it is where they begin their viewing journey. Sometimes that journey is direct: they know they want to watch Severance or the Knicks game or the latest episode of The White Lotus, and the OS just needs to get them there quickly.
But often it is not. Often they just want to watch something. And in that moment, the TV OS becomes enormously influential,” wrote Wolk.
And whoever owns that TV OS is the one deciding which way that influence swings.
“In a fragmented market, the company that controls discovery is in the proverbial catbird seat,” wrote Wolk. “If viewers have to actively seek something out, many of them won’t.”
The deal announcement said Fox and Roku are “committed to continuing to operate Roku as an open, partner-friendly platform” and “the continued ubiquitous distribution of Fox content.”
If the deal closes, reason stands that Fox would then control prime TV home screen real estate where it could promote its content and services with front-and-center placements or other UI features meant to benefit and drive engagement with its content. Not to mention influence and be the decision-maker when it comes to placement and surfacing of other competing content owners and media company’s apps and titles within the UI.
That’s not to say Fox will turn Roku into a place for only its products, as the release did emphasize remaining “partner-friendly.” And other content partners are key to TVOS players as they help drive revenue to secure those favorable placements and UI integrations. Not to mention the need to actually keep the experience positive and valuable for consumers and users who arguably want to find and enjoy watching content across and from a variety of sources.
Still, in owning the OS and TV entry point for some, Fox would be in a unique position compared to most legacy media companies to promote and surface its own content and streaming offerings.
Another benefit of owning the OS and its digital nature, as Wolk also noted, is the ability to collect and glean information about viewing and consumption behaviors across modes and apps – “data that is valuable to advertisers and programmers alike.”
Fox likes Roku’s reach, CTV advertising and subscriptions
Potential for TVOS user experience control and content discovery influence aside, Fox sees additional benefits and room to grow from bringing Roku under its roof.
While revenue and margins in its device business have been on the decline, Roku successfully built and continues to grow its TVOS platform business, including in the most recent quarter fueled by advertising and third-party subscriptions.
That growth has come in the form of advertising via The Roku Channel and OS monetization with new types of ad inventory and placements throughout the user interface, such as the home screen and dedicated content hubs. Another growth avenue has been its third-party Premium Subscription partners, where Roku sells subscriptions in a similar vein as the Amazon Prime Video Channels store.
Fox’s deal announcement specifically called out getting an entry via Roku into those two “high growth” CTV segments of advertising and subscriptions.
Fox expects the transaction to accelerate its digital strategy, be accretive to free cash flow per share by the second full year after closing and achieve about $400 million of run-rate cost synergies with additional revenue upside.
“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. In 2019, we reoriented the company around live news and sports. In 2020, we acquired Tubi and under our stewardship it has become one of the most successful businesses in streaming,” said Lachlan Murdoch, CEO of Fox Corp., in a statement. “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. This combination will transform the scope of our company into high-growth verticals and yield a step change in our overall growth profile.”
Fox entering the TVOS space
With Roku, Fox would have presence across the TV landscape including traditional linear and virtual pay TV, local broadcast, DTC AVOD and SVOD as well as the built-in linear free streaming.
And control of the CTV user experience and home screen across 100 million households, meaning implications for visibility and discoverability amid a crowded and fragmented TV media ecosystem.
As for the TVOS market, Fox buying Roku would mean another player with new owners that could bring additional resources but also their own aims.
Roku competitor Vizio was acquired by retail giant Walmart for $2.3 billion in 2024, in part for its TVOS platform and advertising business and to power its own in-house brand of smart TVs. The retailer sees opportunity to create a tighter loop and connections between retail media, commerce and content.
Others in the U.S. TVOS space include leading smart TV maker Samsung, as well as LG and those from tech behemoths with Amazon’s FireTV and Google TV.
NBCUniversal, meanwhile, is TVOS adjacent thanks to Comcast and Charter’s Xumo joint venture powered by the former’s EntertainmentOS. But today’s deal between Roku and Fox would mark the first major legacy media company today to also own a significant share of the U.S. CTV device and TVOS market, and related user experiences.
“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,” said Roku’s Wood in a statement. “That’s why our Board of Directors unanimously determined after concluding its strategic review process that this transaction offers a significant premium to Roku shareholders while also providing them with the opportunity to participate in the compelling future upside of the combined company."