Fox Corporation today announced that it has entered into a definitive agreement to acquire Tubi, a leader in the fast-growing free ad-supported streaming category, for approximately $440 million in net cash. FOX says that the acquisition underscores their long-term strategic initiatives to broaden and enhance FOX’s direct-to-consumer digital reach and engagement.
Tubi brings to FOX an expanded consumer offering with a sizable, younger-skewing and directly connected user base that spends over 160 million hours per month watching content on the service.
Tubi, which is currently available on more than 25 digital platforms in the United States, features over 20,000 titles and 56,000 hours of film and episodic television programming from over 250 content partners, including many of the major studios. The combination of Tubi’s reach, the resonance of its content and the quality of its technology platform have doubled the service’s usage and monetization over the last 12 months.
Tubi will also seamlessly integrate with and deepen FOX’s capabilities in key areas such as digital advertising, direct-to-consumer interfaces and personalization technology. Similarly, Tubi will be able to fully leverage FOX’s advertising and distribution relationships, as well as its national and local promotional platforms, to further augment the service’s growth trajectory.
FOX plans to continue to run Tubi as an independent service anchored by its robust consumer offering of licensed entertainment content. FOX will evaluate opportunities to expand the Tubi offering not through original content, but rather in a cost-effective manner by leveraging our expertise in national and local news and sports programming.
Executive Chairman and Chief Executive Officer of Fox Corporation, Lachlan Murdoch commented: “Tubi will immediately expand our direct-to-consumer audience and capabilities and will provide our advertising partners with more opportunities to reach audiences at scale. Importantly, coupled with the combined power of FOX’s existing networks, Tubi provides a substantial base from which we will drive long-term growth in the direct-to-consumer arena.”
Tubi Founder and CEO Farhad Massoudi, who will continue to head Tubi, added: “Fox Corporation’s relationships with advertisers and distribution partners, combined with the company’s dominance in news and sports programming, will help Tubi continue to grow and differentiate itself in the high-growth ad-supported streaming marketplace. I am proud of what the team has already accomplished here at Tubi and we couldn’t be more excited about joining such a fast-moving, entrepreneurial company. We look forward to working together with FOX to accelerate Tubi’s leadership position in the market and bring new competencies to FOX.”
FOX will finance the acquisition principally with the net proceeds from the completed sale of its stake in Roku. In doing so, FOX preserves its balance sheet capacity by essentially exchanging a passively held minority investment for full ownership and control of a leadership position in the free ad-supported streaming market.
On the sale of FOX’s ownership stake in Roku, Murdoch added: “We were an early investor in Roku and continue to admire the ongoing accomplishments of Anthony Wood and his team. We are pleased to expand our partnership with them as a result of the Tubi acquisition.”
The Tubi transaction, which is subject to regulatory approvals and the satisfaction or waiver of customary closing conditions, is expected to close before June 30, 2020.