Fox is purchasing Roku in a $22 billion deal; the Rangers Sports Network is reportedly interested in local NBA broadcast rights; and the DOJ investigation of Paramount-WBD merger reportedly closed as career lawyers were leaning towards recommending a lawsuit. Plus news on the FIFA World Cup, ESPN, NBC Sports and the World Series of Poker.
Fox to purchase Roku in $22 billion deal
Fox Corporation on Monday announced a deal to purchase the streaming media business Roku as part of a cash-and-stock transaction that assigns the latter company an enterprise value of about $22 billion. The deal for $160/share will bring Fox networks, the Tubi platform and Roku under the same roof, something that Fox executive chair/CEO Lachlan Murdoch called “a natural extension of the deliberate and focused strategy” the company has “been executing for nearly a decade.” Once the business combination closes, which is expected to close in the first half of 2027, shareholders of Fox will own 73% of the company, and those of Roku will hold the remaining 27% interest.
The transaction is expected to generate $400 million in “run-rate cost synergies” and create an entity with net leverage of “approximately 2.8x.” This is significantly lower than the net debt-to-EBITDA ratio of 4.3x “on a synergized basis” expected out of Paramount’s impending acquisition of Warner Bros. Discovery in a $111 billion deal. Fox is paying $96/cash and 0.9693 shares of its company Class A common stock for all outstanding Class A and B shares of Roku “immediately prior to the effective time of the merger.” It should be noted that Fox secured a $12 billion loan for the deal from Morgan Stanley Senior Funding.
Roku chairman/CEO Anthony Wood will be added to the board of directors at Fox Corporation and “have an ongoing role at the combined company” as well. In a statement, Wood explained that the company’s 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.” Tubi and Roku are expected to remain separate offerings once the deal closes.
When Fox Corporation acquired Tubi five years ago in a deal worth $440 million, the company largely funded the transaction from the proceeds yielded by selling its 5% minority stake in Roku. News Corporation, which held all Fox interests prior to the media conglomerate splitting into two publicly traded companies, participated in a Series F funding round for Roku in May 2013. Roku eclipsed 100 million global streaming households this past April, and the platform is responsible for 3% of monthly U.S. television viewership, per Nielsen Media Research. Fox Corporation started offering its content through the Fox One direct-to-consumer platform last August.
Rangers Sports Network reportedly interested in local NBA broadcast rights
Rangers Sports Network is interested in obtaining the local broadcast rights for NBA teams whose games were previously televised on networks owned by Main Street Sports Group, according to a report by Tom Friend of Sports Business Journal. The RSN, which is owned and operated by the Texas Rangers through its Rangers Sports Media & Entertainment Company, could reportedly end up paying teams involved “approximately $15 million or more annually” in addition to offering “a flexible direct-to-consumer streaming product.” Rather than a minimum guarantee, the Rangers Sports Network “is offering an 85/15 revenue share split after production expenses,” per Friend.
Any potential deal is complicated by the NBA’s reported plans to launch a centralized local media rights solution as soon as next year, which would require the league to assume control of teams’ local rights. Fubo opted not to continue its pursuit of the ex-Main Street teams because of that uncertainty. Already this offseason, the Detroit Pistons and Miami Heat announced agreements to distribute their games via over-the-air channels, while the other 11 teams impacted by Main Street winding down operations have yet to reveal future regional television plans. BravesVision reportedly has interest in broadcasting games for the Memphis Grizzlies.
“Given the varying challenges with local game broadcasts for many professional sports teams in recent months, and the club’s unique approach in creating Rangers Sports Network, our organization has joined others throughout the industry in conversations about the future of team broadcasts,” Rangers Sports Network said in a statement provided to Sports Media Watch. “While this dialogue is continuing, RSN has yet to finalize any agreement with outside entities at this time.”
Rangers baseball games have been available to stream through Victory+, which has been reported as trying to secure local NBA rights as well. Friend reported that NBA teams working with Rangers Sports Network would be allowed to sign separate direct-to-consumer pacts. This, he reported, could theoretically permit teams to maintain the linear television option and move to the NBA streaming solution once available.
DOJ investigation of Paramount-WBD merger reportedly closed as career lawyers were leaning towards recommending lawsuit
Career lawyers at the U.S. Department of Justice “were leaning toward recommending a lawsuit” to challenge the impending merger of Paramount and Warner Bros. Discovery, but were unable to do so before the agency closed its investigation last week, according to a report by Dave Michaels, Dana Mattioli, Sadie Gurman and Jessica Toonkel of The Wall Street Journal. This potential litigation would have focused on whether the combination of the companies’ movie studios would have been “anticompetitive” and in violation antitrust law.
The DOJ antitrust division said in a statement last week that “the transaction is not likely to result in harm to competition or American consumers” in areas such as SVOD, linear television and various studio activities. Paramount CFO Dennis Cinelli said at the MoffettNathanson Media, Internet & Communications Conference last month that the company expects to close the deal to acquire WBD in the third quarter. Oliver Darcy of Status reported that the media conglomerate is targeting Wednesday, July 15 as the specific date.
If the deal closes at this time, Paramount would own both CBS Sports and TNT Sports before both divisions prepare for their fall slate of sports broadcasts. The company would also avoid the $0.25/share “ticking fee” calculated daily and payable to WBD shareholders every quarter in which the deal does not close “beginning after September 30, 2026.” Paramount would owe WBD a $7 billion regulatory termination fee if the deal does not receive regulatory approval. The company already paid Netflix a $2.8 billion termination fee on behalf of Warner Bros. Discovery after submitting what was deemed a “company superior proposal” in February.
NHL commissioner Gary Bettman said during an appearance on “The Varsity” with John Ourand earlier this year that the merger was “potentially very good for us.” Bettman later added that while he had not spoken to Paramount chairman/CEO David Ellison about NHL games airing on CBS, he said he would be “very excited to see the opportunity that being with CBS and CBS Sports would present.” The NHL is entering the penultimate season of its U.S. television media rights deal in which the Stanley Cup Final airs on the TNT cable television network every other year, which has resulted in viewership declines.
Plus: FIFA World Cup, ESPN, NBC Sports, World Series of Poker
- Ad space during FIFA World Cup hydration breaks cost “roughly $200,000,” but the price point surges “to around $750,000 when the U.S. national team is playing,” according to a report by Robert O’Connell and Suzanne Vranica of The Wall Street Journal. Fox Sports is reportedly using a hybrid approach in terms of full-screen and split-screen advertisements at these mandatory stoppages at the midpoint of each half.
- Investigative reporter Don Van Natta Jr. has re-signed with ESPN under a multiyear deal, the company announced on Tuesday. Van Natta has worked as a senior writer at ESPN since 2012, joining the company after previously serving as an investigative correspondent for The New York Times, a tenure in which he received the Pulitzer Prize.
- NBC Sports Philadelphia analyst John Kruk and former MLB RP John Franco will call the “Sunday Night Baseball” matchup between the Philadelphia Phillies and New York Mets this week on NBC alongside Jason Benetti at 7 PM ET. The “MLB Sunday Leadoff” game, starting at 3 PM ET this week, will feature Twins.TV analyst Trevor Plouffe and Dbacks.TV analyst Luis Gonzalez with play-by-play announcer Matt Vasgersian and reporter Caroline Pineda as the Arizona Diamondbacks take on the Minnesota Twins.
- The World Series of Poker, which is airing on ESPN for the first time in five years next month, will be produced by Omaha Productions for the main event and accompanying final table, according to a report by Tony Maglio of The Hollywood Reporter. The coverage will reportedly feature announcers Ali Nejad, Nick Schulman, Lon McEachern and Norman Chad, along with “more than 50 cameras to cover three feature tables.”
