Fox Sells Stake In Roku To Purchase Ad-Supported Streamer Tubi For $440 Million

As had previously been rumored, Fox is the latest player to snatch up a free streaming service, with the purchase of ad-supported TV and film purveyor Tubi for $440 million in cash.

The acquisition follows Viacom’s purchase of competitor Pluto TV last year for $340 million, and Comcast’s purchase of Xumo last month. NBCUniversal is also reportedly in talks to acquire Walmart-owned Vudu.

To pay for Tubi — which says its users spend 160 million hours on the service every month — Fox sold its 5% equity sake in Roku, which it acquired in 2013. In a press release, Fox said the Roku stake sale would “preserve 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.” The Tubi transaction is expected to close before June 30.

Tubi, which is currently available on 25 digital platforms

nationally, comprises 20,000 film and TV titles. The company says that usage and monetization –predominantly via ads — have doubled over the last 12 months. Fox says it will operate Tubi as an independent entity with founder and CEO Farhad Massoudi remaining at the helm. Fox will also seek to expand Tubi’s content offerings by leveraging its news and sports programming at both the national and local levels. That said, Fox says that it is not looking to fund original content for Tubi.

“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,” Fox’s executive chairman and CEO, Lachlan Murdoch, said in a statement.

“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,” Massoudi added.