World News

Roku tries Fox Super Bowl play but stock loses yardage

By Noel Randewich

SAN FRANCISCO (Reuters) – Shares of Roku tumbled 7% on Friday after the streaming video company told customers it was removing Fox channels from its platform ahead of Sunday’s Super Bowl broadcast.

“On January 31, 2020, all standalone FOX channels will no longer be available on Roku streaming devices,” Roku wrote in an email to customers on Thursday. It added that its viewers could watch Fox channels on other companies’ services, including Hulu and Alphabet’s <GOOGL.O> YouTube.

Shares of Fox Corp <FOXA.O>, which is broadcasting the National Football League championship game between the San Francisco 49ers and Kansas City Chiefs, fell about 1%.

The removal of Fox from its platform is related to the Jan. 31 expiration of an agreement between the two companies.

“Roku’s tactics are a poorly timed negotiating ploy, fabricating a crisis with no thought for the alarm it generated among its own customers,” Fox said in a statement sent to Reuters.

Roku did not immediately respond to a request for comment.

Carriage disputes between networks and cable providers in the past have led to viewers losing the ability to watch channels. Last July, millions of DirecTV subscribers temporarily lost access to CBS programming in over a dozen cities.

While viewership has declined in recent years, the Super Bowl remains the single most watched U.S. event of the year, making it a potentially high-value pawn in contract negotiations.

Riding a wave of investor enthusiasm over the consumer shift from cable television to streaming, Roku’s stock has surged almost 800% since its initial public offering in 2017. Friday’s sell-off reduces Roku’s 12-month return to 172% and leaves it at a level last seen in November.

(Reporting by Noel Randewich; additional reporting by Dan Levine; Editing by Dan Grebler)