The news sent the stock on an abrupt slide, falling as much as 7.6% to $120.71 in New York, its lowest since Nov. 11. Shares of Fox Corp. fell as much as 1.7% intraday.
Roku's notice to customers comes as a distribution agreement with Fox is scheduled to expire, after hosting the network's channels for years. The dispute could be a big blow to Fox prior to Sunday's match-up between the San Francisco 49ers and Kansas City Chiefs.
According to a Fox spokesperson, "Roku's threat to delete FOX apps from its customers' devices is a naked effort to use its customers as pawns. Only Roku can pull apps from its customers' devices, and we would urge them to stop the intimidation tactics and reconsider the merits of irritating their best customers in pursuit of Roku's own interests."
Rosenblatt Securities views the weakness in Roku as an opportunity for investors to increase their holdings. Mark Zgutowicz, a media analyst at the firm, commended the company for "acting from a position of strength" and leveraging its leadership among over-the-top streaming providers.
In a blog post, Roku asserted that it "tried for months" to reach a deal and even offered Fox an extension although the network operator declined.
"If an agreement is not reached, we will be forced to remove FOX channels from the Roku platform because we can't distribute content without an agreement," Roku said. "Our discussions with FOX continue and we hope that FOX will agree to an agreement soon."
Published : February 01, 2020
By : Syndication Washington Post, Bloomberg · Kamaron Leach