Why Fox is buying Roku for $22 billion and what it means for streaming

Fox is buying Roku at an estimated $160 a share, double where its stock was this time last year. The price is also equivalent to 24 times of Roku’s estimated 2027 earnings before interest, taxes, depreciation and amortization, as per S&P Global Market Intelligence data. The acquisition is being funded by a $12 billion loan obtained by Fox.

The deal has already been approved by the boards of directors of both companies and is expected to close in the first half of 2027. If it goes through, the Fox-Roku deal could mark one of the largest media acquisitions in the past few years. It also comes amid a wave of consolidation in media as traditional broadcasters race to build scale in streaming.

In 2020, Fox acquired streaming service Tubi for $440 million as competition intensified across the live streaming industry. The company also launched Fox One, its direct-to-consumer streaming service, last year.

Calling it a defining moment for the company, Fox CEO Lachlan Murdoch said, “This combination will transform the scope of our company into high-growth verticals and yield a step change in our overall growth profile. Roku pioneered streaming TV and scaled it into a leading CTV platform. Together, we intend to lead its next chapter.”

“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. I couldn’t be more excited about what we’ll accomplish together,” Roku founder and CEO Anthony Wood said in a press release.

To understand the significance of the deal, let’s take a closer look at Roku’s history, its turnaround strategy, how the acquisition benefits each side, and broader implications for the streaming ad market.

Roku’s fall and rise

Anthony Wood founded Roku in 2002 with the initial goal of building and selling internet-connected audio hardware. A few years later, Wood reportedly met Reed Hastings, one of the co-founders of Netflix. At this point, Netflix had been working with hardware manufacturers to build streaming clients into their hardware. The first of these was the Netflix Player by Roku that was launched in 2008.

The next year, it launched the Roku Player, which was a $99 set-top box that let users stream content from Netflix, Amazon, and others, over the internet directly to your TV set.

Fast forward to 2026, Roku has grown its streaming hardware business to include its own streaming sticks and smart TVs. However, the most valuable part of Roku is not the hardware. It is Roku’s operating system (Roku OS) and advertising business. Roku also has its own FAST (free, ad-supported streaming television) service called The Roku Channel.

Its TV OS platform is currently used by over 100 million households, according to the company. The COVID-19 pandemic is said to have helped Roku become profitable in 2021. But post-pandemic, Roku struggled to compete with heavyweights such as Netflix and Amazon for advertising dollars. The shift from smart devices to smart televisions also dented demand for its devices, with growth slowing sharply in 2022 and 2023.

The streaming tech giant has since turned things around, with two crucial moves to accelerate ad growth. First, Roku started allowing outside ad tech firms to help sell its ad inventory. Second, it allowed any kind of marketer to buy spots on its valuable home screen, rather than limiting those ads to entertainment firms as it had been doing.

These two moves, along with cost-conscious management, is said to have helped Roku win back investors, pushing its stock up from $60 last April to $119 on Thursday, June 11.

Why is Fox buying Roku?

The acquisition represents a clear win for Roku since its long-term growth prospects are uncertain in a maturing streaming market. In addition, the streaming ad market, projected to reach $61.4 billion globally by 2027, is relatively small and increasingly crowded with major players such as Amazon, Disney, and YouTube vying for their slice of the pie. So, the deal is well-timed for Roku amid concerns that it could be squeezed out by larger competitors.

But what does Fox stand to gain from the deal? A few years ago, Fox sold valuable parts of its business, including its film studio and a few high-profile cable channels, to Disney. This reduced the Murdochs’ sprawling media empire to an aging broadcast TV business and Fox News Channel.

Following its 2020 acquisition of Tubi, Fox also obtained a piece of the streaming ad market. The Roku deal undoubtedly gives it much more exposure to streaming.

Once the deal goes through, Fox’s news and sports channels and Tubi will be integrated into Roku’s connected TV platform, as per the company. This will give Fox direct access to Roku’s audience of 100 million households, helping the company serve targeted ads more effectively while relying less on traditional delivery.

Fox also said that the acquisition gives it a stronger foothold in connected TV or CTV which is a fast-growing market for streaming ads and subscriptions. The combined company will become the third-largest television business in the United States by viewership, Fox said.