NEW YORK and LOS ANGELES, March 17,
2020 /PRNewswire/ -- Fox Corporation (Nasdaq: FOXA,
FOX) 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 consideration at
closing.1 The acquisition of Tubi underscores FOX's
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 formidable 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 Tubi acquisition principally with the net
proceeds from the completed sale of its stake in Roku, Inc.
("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.
Allen & Company is acting as financial adviser to FOX, and
Jenner & Block and Kirkland & Ellis LLP are acting as FOX's
legal advisers regarding the transaction. Qatalyst Partners is
acting as sole financial adviser to Tubi, and Fenwick & West
LLP is acting as its legal adviser.
About Fox Corporation
Fox Corporation produces and distributes compelling news, sports
and entertainment content through its iconic domestic brands
including: FOX News Media, FOX Sports, FOX Entertainment, and FOX
Television Stations. These brands hold cultural significance with
consumers and commercial importance for distributors and
advertisers. The breadth and depth of our footprint allows us to
deliver content that engages and informs audiences, develop deeper
consumer relationships and create more compelling product
offerings. FOX maintains an impressive track record of news,
sports, and entertainment industry success that will shape our
strategy to capitalize on current strengths and invest in new
initiatives. For more information about Fox Corporation, please
visit www.FoxCorporation.com.
Cautionary Note Regarding Forward Looking Statements
This news release contains forward-looking statements and
information within the meaning of the Private Securities Litigation
Reform Act of 1995. Words such as "may," "will," "should,"
"likely," "anticipates," "expects," "intends," "plans," "projects,"
"believes," "estimates," "outlook" and similar expressions are used
to identify these forward-looking statements. These statements are
based on management's current expectations and beliefs and are
subject to uncertainty and changes in circumstances. Actual results
may vary materially from those expressed or implied by the
statements in this news release due to changes in economic,
business, competitive, technological, strategic and/or regulatory
factors and other factors affecting the operation of the business
of Fox Corporation. More detailed information about risk factors
affecting FOX Corporation is contained in the documents FOX
Corporation has filed with or furnished to the Securities and
Exchange Commission, including its Annual Report on Form 10-K for
the fiscal year ended June 30, 2019
and subsequent Quarterly Reports on Form 10-Q.
(1) Potential additional consideration in
the form of deferred consideration and unvested options totaling
approximately $50 million may be due
over the course of 3 years
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SOURCE Fox Corporation