Fox faces a Justice Department antitrust review of its proposed $22 billion Roku deal and could owe the streaming company about $1.2 billion if regulators kill the transaction.
Fox disclosed last week that the Justice Department issued a Second Request, a sign that antitrust lawyers are examining what happens when a major owner of must-have sports and news programming buys one of the main gateways through which millions of Americans reach streaming television. Roku’s home screen, operating system and ad technology increasingly decide what people watch. The company has assigned the deal an enterprise value of $22 billion.
The Communications Act gives the FCC some authority over competition in devices used to access multichannel video programming, but the agency has not historically treated streaming platforms like scarce broadcast spectrum. FCC Chair Brendan Carr has not focused on that issue.Carr instead keeps emphasizing that broadcasters such as NBC and ABC operate under special rules because they receive free licenses to use public spectrum he values at “many billions of dollars.”
That conception of license value is colliding with Fox’s own books.
In its latest 10-K, Fox recorded a $64 million noncash impairment primarily against FCC licenses amid weaker advertising expectations in some markets. It booked roughly $70 million in similar impairments the year before. The company also warned that remaining licenses sit close to their carrying values: a half-percentage-point increase in the discount rate used to value future earnings would drop their aggregate fair value about $125 million below the amount on the books.
\The Roku breakup fee and the DOJ review are the regulatory matters with immediate financial stakes. Carr’s broadcast-license rhetoric is the performative counterpart.