Report: FOX Turned Down Multi-Billion Dollar Offers to Sell Tubi; Valuing Streamer Much Higher
Sorry, media and entertainment companies, Tubi is not for sale. That’s according to a report from Christopher Palmeri of Bloomberg News, who says that FOX has received several unsolicited offers from companies looking to buy the company’s ad-supported video-on-demand (AVOD) and free ad-supported TV (FAST) service.
Those offers have ranged upwards of $2 billion, nearly five times the amount that FOX paid for Tubi when it purchased the service in 2020. Tubi has grown dramatically in that time, going from 25 million active users to over 50 million. FOX has reportedly turned down the overtures because it believes that the service is worth more than it has been offered thus far.
It’s no surprise that FOX wants to keep Tubi in-house. The service saw its best month ever in terms of both user engagement and total viewing time in December 2022. The addition of new FAST channels from Warner Bros. Discovery to the service in early February will surely help boost those numbers even higher.
Tubi expects to create twice as many original programs this year as it did in 2022, suggesting that the service isn’t simply relying on an ever-growing content library to attract new users. Original titles are a big driver of new subscribers for AVOD services, so Tubi is on the right track with its increased slate of originals. A Parks Associates survey from December found that 65% of AVOD users said that they chose that service because it offered programming that no other service could provide.
World Cup soccer also helped turn Tubi into a highly valuable service in 2022. The service was the home of on-demand replays of every match of the 2022 FIFA World Cup, and Tubi will likely see another jump in users when it offers matches from the 2023 FIFA Women’s World Cup later this year.
Despite the success of on-demand sports replays on Tubi, don’t expect the service to be adding live sports to its portfolio anytime soon. FOX Corporation CFO Steve Tomsic spoke in December about such a possibility, but he doesn’t see the Tubi model as a good fit for the expensive rights deals that would be involved in trying to add live sports to the service.
FOX is in a decent financial position as a company, currently. Far from looking to sell assets like Tubi, the media outlet is in fact looking to buy. FOX CEO Lachlan Murdoch told investors in the company’s latest quarterly earnings call that FOX was ready to start investigating mergers and acquisitions.
That has led some to speculate that the company could be looking into a purchase of Hulu, which it formerly owned a stake in and which Disney might be willing to sell in order to pare back its streaming operations.
Tubi users who are enjoying the service as it is currently being run can breathe a sigh of relief. Although FOX is receiving unsolicited offers for Tubi, it will be keeping the platform in-house unless it gets an offer that blows its corporate socks off.
Tubi
Tubi is a free video streaming service that includes on-demand access to 200,000+ movies and TV episodes - more than any other streaming service. Its ad breaks are shorter and less frequent than most free services. Fox executives have called their service “TV on steroids.”