Newsmax Lobbies DOJ to Block Fox's Reported $22 Billion Roku Bid

Newsmax is actively lobbying the U.S. Department of Justice to block a proposed $22 billion acquisition of Roku Inc. (NASDAQ:ROKU) by Fox Corp. (NASDAQ:FOX), according to a report from Semafor. The effort, led by Newsmax CEO Chris Ruddy, has reportedly resulted in federal antitrust regulators widening their investigation into the potential deal.

DOJ Probe Expands

Citing communications it reviewed and sources familiar with the situation, Semafor reported that the DOJ's antitrust division has expanded its inquiry following outreach from Ruddy and his allies. The investigation is now more closely examining the proposed transaction's potential impact on competition within the streaming video landscape.

This development introduces a significant regulatory hurdle for Fox, which is seeking to acquire Roku's dominant streaming platform and technology. The heightened scrutiny could lead to delays or impose conditions on the potential merger, creating uncertainty for investors in both companies.

Competitive Allegations

The pressure from Newsmax stems from an ongoing legal conflict between the two conservative media outlets. Newsmax has pursued antitrust litigation against Fox, alleging that the larger network uses its market power and exclusionary distribution agreements to disadvantage smaller competitors on streaming services.

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Fox has consistently denied these allegations, characterizing them as an attempt by Newsmax to use the legal and regulatory systems to compensate for its own market performance. According to the report, Fox maintains that the claims lack legal merit.

Strategic Implications

For Fox, the expanded DOJ review presents an unexpected challenge to a major strategic move aimed at solidifying its position in the direct-to-consumer streaming market. The acquisition of Roku would give Fox control over a critical distribution gateway for digital content.

This is not the first time Newsmax has used regulatory and political channels to challenge larger industry transactions. While previous efforts by Ruddy to disrupt major media deals have not always succeeded, his access to political figures ensures that such challenges are taken seriously by corporate legal and government relations teams, adding a layer of complexity to the deal's path forward.