Fox Corporation stands at an inflection point that dwarfs its ordinary earnings story. The company just closed the strongest fiscal year in its modern history, and the numbers now frame the backdrop for a much larger event. Fox has agreed to acquire Roku for roughly $160.00 per share in a mix of cash and stock. The enterprise value of the deal is about $22 billion, and it is expected to close in the first half of calendar 2027.
Fiscal 2026 revenue reached a record $17.13 billion. Adjusted EBITDA also hit a record, landing at $3.91 billion. Those are the numbers that matter as the company's standalone baseline heading into the combination.
The deal converts a defensive linear broadcast business into a combined media and technology platform. It spans more than 100 million global streaming households, which is a step change in addressable reach for the Fox brands. Pro forma revenue lands near $22.0 billion, with roughly a third of that mix flowing through the higher-growth Tubi and Roku streaming engines.
Execution risk has shifted from operating the existing business to clearing the U.S. Department of Justice antitrust review. Both companies received a Second Request on September 8, 2026. Shareholders are therefore paid for a bet on regulatory patience, integration discipline, and the durability of Fox's sports and news portfolio through a cycle of rising rights costs.
Fox operates two reportable segments: Cable Network Programming, which carries FOX News, FOX Business, and the cable sports networks, and Television, which covers the broadcast network, the owned and operated stations, and Tubi. Cable Network Programming generated $7.35 billion of revenue in fiscal 2026. The Television segment produced $9.67 billion over the same period.
The strategic logic of the Roku acquisition is distribution capture. Linear broadcast and cable distribution has eroded for two decades as subscribers move to connected TV, and Fox's most valuable assets, live sports and news, are exactly the content that anchors streaming platforms. By owning the largest U.S. CTV operating system, which held a 44 percent share of U.S. CTV viewing hours in the fourth quarter of 2025, Fox internalizes the margin and data that third-party platforms currently capture on top of Fox's content.
The transaction pairs Fox's premium live content with Roku's consumer interface, first-party household data, and advertising technology. The parties describe the combined company as the third-largest player in U.S. television by share of viewing, spanning broadcast, cable, local, and streaming environments. That breadth matters because advertisers increasingly buy reach across platforms rather than inside a single linear network.
The structure is a cash and stock merger in which Fox issues 152 million Class A shares, and it funds the $9.1 billion cash consideration with new debt and cash on hand. The new equity is valued at roughly $10.0 billion at the reference price. Existing Fox shareholders retain about 73 percent of the combined company. Lachlan Murdoch, Executive Chair and Chief Executive Officer, framed the deal as the next step in a decade-long reorientation toward live news, sports, and streaming.
The content moat is the portfolio of sports and news rights that Fox controls. The broadcast of the FIFA Men's World Cup in fiscal 2026 lifted full-year advertising revenue by $474 million, and the network's rights stack also spans the NFL, MLB postseason, NASCAR, and the Big Ten. Live appointment viewing is the one category where streaming has not displaced linear, and it is the category advertisers pay the highest premiums to reach.
Roku adds the platform layer. Its operating system runs on more than 45 TV OEM brands in over 15 countries. It also reaches more than 100 million global streaming households, which is why the platform commands such a large share of connected viewing. That footprint includes more than half of all U.S. broadband homes. LTM advertising at Roku is about $2.5 billion, and first-party, authenticated household data gives the combined company targeting capability that linear measurement cannot match.
The moat compounds in three ways. First, content and distribution are vertically integrated, so Fox controls both the programming that drives CTV usage and the home screen where it is discovered. Second, Roku's device business, roughly $5.0 billion of LTM revenue across players and first-party TVs, creates a hardware wedge that locks in the ecosystem. Third, the advertising technology stack, worth about $6.5 billion of premium inventory with demand-side integration, converts household-level data into measurable CTV ad sales.
The weaker moat is the linear side itself. Cable distribution revenue still depends on MVPD carriage fees, and average subscriber counts fell in fiscal 2026 even as per-subscriber rates rose. The Roku deal is partly a hedge against that erosion: the value of Fox's content becomes less hostage to the negotiating position of cable and satellite bundles if the content can also be monetized directly on a platform Fox owns.
Fiscal 2026 revenue rose 5 percent. The total landed at a record $17.13 billion. Growth came from every revenue line, which was not obvious a year earlier given the post-election advertising drag. Distribution climbed 4 percent. Advertising climbed 7 percent, while content and other revenue added a further 4 percent. Adjusted EBITDA climbed 8 percent. It reached $3.91 billion on the strength of the Television segment.
The Television segment delivered the biggest swing of the year. Segment EBITDA jumped 52 percent to $1.44 billion, driven by World Cup advertising and by lower sports rights amortization versus the Super Bowl year. Cable Network Programming was steadier: segment EBITDA edged up 2 percent. It reached $3.10 billion, with per-subscriber rate gains offsetting a smaller average subscriber base. Net income attributable to Fox stockholders fell to $1.69 billion, down from $2.26 billion in the prior year. That is a 26 percent decline on the surface. In substance, it is largely a fair-value artifact: non-operating other swung to a $773 million net expense, driven by changes in the fair value of Fox's investment in Flutter Entertainment, its sports betting affiliate. Adjusted net income, which strips out those marks, actually rose. It reached a record level for the company.
Cash generation remains strong, and it funded the capital returns. Fox ended fiscal 2026 with $4.2 billion of cash. It returned roughly $2.3 billion to shareholders through dividends and buybacks, including a $1.5 billion accelerated share repurchase. Free cash flow has comfortably funded the dividend and a meaningful repurchase program, which is the base case for continued capital returns even after the acquisition closes. The launch of FOX One, the direct-to-consumer streaming service introduced in August 2025, weighed on results. Corporate and Other segment EBITDA fell $280 million, or 80 percent. It landed at a negative $631 million, because intercompany content and marketing costs for the launch outpaced early distribution revenue. That is the expected profile of a new DTC service in its first year, and it is the line item the Roku acquisition is designed to replace at scale.
The balance sheet heading into the deal is investment grade. Total debt at the fiscal year end stood at $6.6 billion. The cash balance was $4.2 billion, so net debt was roughly $2.4 billion before the acquisition. The transaction adds about $8.3 billion of new debt at close. That lifts pro forma net leverage to around 2.8x EBITDA. Fox says that level remains comfortably investment grade and leaves room for the existing share repurchase and dividend program to continue uninterrupted.
The first execution risk is regulatory, and it is the dominant one. On September 8, 2026, both Fox and Roku received a Second Request from the U.S. Department of Justice. That development extends the HSR waiting period until 30 days after both companies substantially comply, and in practice it signals that the DOJ sees a theory of harm to work through rather than a routine clearance. The mechanism matters because Fox's sports and news content is the programming that drives CTV usage, and Roku is the largest CTV distribution platform. A plausible DOJ theory is that the combination would give one firm control over both a top content supply and the top consumer interface, letting it squeeze rivals on either side of the stack. The consequence for shareholders is a prolonged period of uncertainty, with the deal potentially closing anywhere between late 2026 and mid-2027, and a small but real tail risk of a forced remedy or a broken deal.
The counterargument to the deal is straightforward and worth taking seriously. Fox is paying a premium, roughly $160.00 per share for a company that trades at a modest multiple of earnings, and it is levering an investment grade balance sheet to buy a growth story when it already owns a strong streaming asset in Tubi. A skeptical read is that Fox is overpaying for Roku's growth at the top of the CTV cycle, and that the linear side of the business may continue to shrink fast enough to offset the platform upside.
Integration is the second major execution variable. Fox's own DTC experiment, FOX One, posted a first-year EBITDA loss of about $631 million. The case for Roku is that its platform economics are structurally different, with a positive gross margin and a growing advertising business, but merging two large media and technology organizations, with distinct cultures, compensation structures, and technology stacks, is a multi-year effort. The parties cite roughly $400 million of run-rate cost synergies with additional revenue upside, and those numbers are the bridge between the purchase price and the accretion claim.
Management continuity is a stabilizer. On June 11, 2026, Fox extended the employment agreements of Lachlan Murdoch and CFO Steven Tomsic. Both contracts now run through June 30, 2030. The board also raised their target compensation, with Murdoch's target bonus at $9.0 million and his target equity award at $20.0 million per year. The extension signals that the board expects the same leadership to run the company through the integration, and it reduces the chance of a post-deal management vacuum.
The largest downside scenario is regulatory failure. If the DOJ declines to clear the merger, or if it imposes a remedy that guts the strategic rationale, such as requiring the divestiture of part of Roku's ad tech or of Tubi, the deal's value proposition deteriorates sharply. Fox would have spent months in limbo, locked a large block of management time into the process, and paid a reverse termination fee of roughly $1.2 billion in the specific scenario where regulatory approval fails, before returning to a standalone business that may have lost ground in the interim. The second scenario is integration underperformance. Streaming and CTV are talent-dense, fast-moving businesses, and Roku's value depends heavily on retaining the engineers and product people who built the platform. Roku's own filings note that employee retention is a material risk, and the transaction and retention bonus pool is a partial mitigation, not a guarantee. If the combined company underdelivers on the accretion claim, shareholders have funded a higher debt load for a business that is not yet delivering.
The third scenario is linear decay accelerating. Fox's distribution revenue depends on cable and satellite subscribers, and that base has been falling for years. The fiscal 2026 numbers show per-subscriber rate increases offsetting volume declines, but the offset is not guaranteed to persist. If MVPDs cut rates at the next round of carriage negotiations, or if the subscriber decline steepens, the cash engine that funds the debt service and the capital return program weakens just as the acquisition closes.
The fourth scenario is rights inflation. The World Cup year was a record for a reason, and the next rights cycle, which lands in the second half of calendar 2027, sets the sports content cost base for years. Fox has already committed to an additional NFL postseason game and a heavier soccer slate. If rights prices rise faster than advertising revenue, the Television segment margin profile that made fiscal 2026 look so good compresses.
A more subtle risk is the accounting treatment of the deal itself, layered on top of the rights inflation risk above. The pro forma statements show the merger adding roughly $12.8 billion of goodwill and about $8.5 billion of identifiable intangibles. That is the price of the combination sitting on the balance sheet, and if the combined streaming and ad tech businesses disappoint, those assets are candidates for future impairment charges. Impairment does not consume cash, but it hits reported net income and can reset the multiple the market is willing to pay.
The valuation case runs through the pro forma numbers. The unaudited pro forma statement of operations, as filed, shows combined revenue of $22.03 billion for fiscal 2026. Combined income before taxes lands at $779 million, though that figure is depressed by roughly $606 million of financing transaction interest expense that is one-time in character, so it is not the earnings run-rate of the combined company. The cleaner anchor is EBITDA: Fox's $3.91 billion plus Roku's contribution, before synergies, sits near the mid $5.0 billion range. The parties' 2.8x pro forma net leverage figure implies a comparable EBITDA base.
At a market capitalization near $27 billion for the Class A and Class B shares combined, the standalone Fox stock trades at roughly 7x to 8x trailing adjusted EBITDA. The market is therefore assigning the Roku combination only a modest premium over the sum of the parts. That posture is consistent with the Second Request still being unresolved and the closing date sitting in the first half of calendar 2027. The 50-day average price sits near $61.00. The recent close is around $65.00. That spread shows the market has not fully priced in a clean regulatory clearance.
The bear case values the deal as a hold. If the DOJ clears the merger with a delay but no remedy, and if synergies land on schedule, the combined company's EBITDA grows to about $6.0 billion by the second full year, and free cash flow per share turns accretive as management promised. At a mid-single-digit multiple on that EBITDA, the stock has room to re-rate toward the low to mid $70s from current levels, with the dividend and buybacks providing a floor. The base case is a clearance in the second half of calendar 2026 and a close in the first half of calendar 2027. It includes a two-year integration during which cost synergies of roughly $400 million flow through. In that scenario, the multiple on pro forma EBITDA settles in the mid-single digits, and the share price tracks the combination's earnings power plus the capital return program. The variable that moves the stock most is the timing and terms of the DOJ decision, because that determines when the synergy case can be booked and how much of it survives.
The bull case is that the combination proves out the vertical integration thesis: Fox's live sports and news become the anchor content of the largest CTV platform, the ad tech stack lifts CTV advertising margins, and Tubi plus the Roku Channel scale into one of the top two U.S. streaming subscription businesses. If that happens, the combined company earns a multiple closer to growth streaming names rather than linear broadcasters, and the stock has meaningful upside from here. The bear case, stated bluntly, is that Fox has bought growth at the top of the CTV cycle, levered up a business whose linear half is still shrinking, and the market de-rates the whole thing when the Second Request produces a remedy. The current price sits between those two views, which is why the regulatory decision is the single most important variable in the investment case.
The investment case for Fox has changed character, and that is the judgment that matters. For most of the past decade, the stock was a story about a cash-rich linear broadcaster working through sports rights cycles and returning capital to shareholders. That story is still true, and fiscal 2026 proved the business can still deliver record revenue and EBITDA on the back of a World Cup. But the Roku acquisition re-centers the thesis on whether Fox can convert a defensive content franchise into a growth streaming platform without destroying its investment grade balance sheet.
The evidence supports the strategy. The content portfolio is the best in the industry for the one category streaming needs, live appointment viewing, and the platform being acquired is the largest distribution layer in U.S. connected TV. The pro forma financials show a combined company with $22.0 billion of revenue and a meaningful share of that mix in faster-growing streaming and CTV advertising, with a capital structure that remains investment grade. The management team has committed to the deal through 2030, and the capital return program continues.
The evidence against it is equally real. The DOJ Second Request keeps the biggest risk unresolved, the purchase price is a premium that requires the synergy case to deliver, and the linear half of the business is still shrinking even in a record year. The stock's modest premium over the sum of the parts is the market's honest verdict on that tension: the deal is a good strategic bet, but the risk of regulatory delay or remedy has not been paid off.
The bottom line is that Fox is a company with a strong business buying a strong platform at a price that demands execution. Shareholders get a company that owns both the content that drives streaming usage and the platform that delivers it, plus an investment grade balance sheet and a continuing dividend and buyback. What they give up is the simplicity of a standalone story and a period of uncertainty that runs at least to the first half of calendar 2027. The fair framing is that the current price already reflects a split outcome: a full strategic payoff if the deal clears cleanly, and a de-rating if the regulator intervenes. The single variable that resolves the split is the DOJ decision, and until it lands, the stock is a regulatory option wrapped around a real business.