Media group Fox Corporation agreed yesterday to acquire US-based online streaming service Tubi for approximately $440m in a cash deal that will allow film studios Metro Goldwyn Mayer (MGM) and Lionsgate to exit.
The transaction may eventually reach $490m when factoring in deferred considerations and unvested options, according to the Wall Street Journal.
Formally incorporated as AdRise, Tubi runs an online film and television streaming platform that is free to use but bumpered with advertising that cannot be skipped. It increased its monthly active users from 20 million in June 2019 to 25 million by December.
Tubi will continue to operate independently under founder and CEO Farhad Massoudi but will be able to utilise Fox’s digital advertising expertise in addition to adding the company’s national and local news and sports programming to its online content.
Lachlan Murdoch, chairman and CEO of Fox Corporation, said: “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.”
The company had received approximately $31m prior to the acquisition, including $21m from undisclosed investors in 2017.
Lionsgate, MGM, Cota Capital, existing backer Foundation Capital, Bobby Yazdani, Mark Amin and Noosheen and Zod Nazem had provided $6m for Tubi in a 2015 series A round. Streamlined Ventures and SGH Capital are also among the exiting investors.
Fox is part financing the deal through the sale of its 5% stake in US-listed streaming player manufacturer Roku, which would have been worth approximately $415m as of yesterday.
