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Streaming, Sports Betting Will Stoke Fox Stock After Hollywood Exit

Think of Fox (NASDAQ:FOX) and you think of Fox News. That’s what’s left after its Hollywood assets were sold to Walt Disney (NYSE:DIS) in 2019. The deal helped founder Rupert Murdoch divide his assets among six children. The company underpinning FOX stock went with son Lachlan.

The Fox Corporation (FOXA) headquarters in New York City.
Source: Leonard Zhukovsky /

In the two years since, Fox shares have mainly gone sideways, up just 7%. Investors see the TV stations and cable operations as losing audience share. They see Fox as a spectator in the coming streaming wars among Disney, Netflix (NASDAQ:NFLX), Comcast (NASDAQ:CMCSA), ViacomCBS (NASDAQ:VIAC) and AT&T (NYSE:T).

Or are they?

FOX Stock Future Rides on Tubi Buy

Last May, Fox quietly bought Tubi, an ad-supported streaming platform with 25 million users, for $440 million. To buy Tubi, Fox sold most of its stake in Roku (NASDAQ:ROKU).

This has yet to become a great deal for Fox CEO Lachlan Murdoch. Roku is up 412% since the sale and is now worth 75% more than Fox itself. But Fox is also up nearly 60%.

The key to Tubi is its potential. Fox can license its programs to Tubi and get free money, as it did in spinning shows to its cable networks. Tubi can also become a platform for taking Fox’ other networks into the streaming universe.

How is that doing? Pretty good. Fox expects Tubi revenue to soon exceed that of its broadcast stations. Its audience is up to 33 million, and it’s beating Comcast’s free version of Peacock among viewers ages 25-34. The “Ad-supported Video on Demand” (AVOD) market is expected to triple by 2025, when it will be worth $14 billion.

Making Book on Sports Betting

There’s a second catalyst for Fox growth: Sports betting.

Fox owns Fox Bet, which it can combine with its Fox Sports programming as easily as Disney’s ESPN combines with Caesars Entertainment (NASDAQ:CZR) or Sinclair Broadcasting (NASDAQ:SBGI) turned its regional sports networks into Bally’s (NYSE:BALY). That’s the new name for the former Twin River casinos Eldorado sold off in its Caesars deal.

Sports betting is a fast-growing market. Thanks to a 2018 Supreme Court decision, sports betting is taking off. It’s now legal in 18 states, and the hunger for state tax revenue means more will likely follow.

Late last year, Fox took full control of FOX Bet, as part of Flutter Entertainment’s (OTCMKTS:PDYPY) buying most of FanDuel. That deal gives Fox an option to buy up to 18.5% of FanDuel in July.

Now, combine Flutter’s technology with Fox Sports’ reach and put the whole thing on Tubi. Moffett Nathanson analyst Michael Nathanson says this makes Fox a buy. He thinks Fox should sell out of the broadcast network to go all-in on sports betting.

Lachlan Murdoch now calls Fox “the loyal opposition” to the Biden Administration. CNN thinks this is a big deal. But Fox News has always been more talk radio than news. The business model is cheaper to run and more profitable. A smaller audience, in other words, doesn’t guarantee lower profits.

The Bottom Line on FOX Stock

Under Lachlan, FOX stock is becoming an intriguing investment.

While big streaming players focus on building libraries of shows and movies, Fox has an “asset light” model in Tubi that can simply license and monetize them.

While Disney and the other networks battle for broadcast rights on games, Fox can run betting shows from a studio and pick up on all the action they’re generating.

This has always been a Fox hallmark. See what works, get in with a twist that costs less to run, and ride others’ investments to profit. As an investor, just remember that Fox News is now the least-important part of the company.

At the time of publication, Dana Blankenhorn directly owned shares in T.

Dana Blankenhorn has been a financial and technology journalist since 1978. He is the author of Technology’s Big Bang: Yesterday, Today and Tomorrow with Moore’s Law, available at the Amazon Kindle store. Write him at, tweet him at @danablankenhorn, or subscribe to his Substack newsletter.

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