Elon Musk has invested $1 billion in the new Skydance, according to a report in Semafor, amid speculation by Wall Street, industry players and, yesterday, John Malone, that the world’s richest man and Tesla chief would step in to lend his friend Larry Ellison a hand.
At a conference yesterday in New York, the former Liberty Media chief anticipated that Musk would fork over about $10 billion to help buck up Skydance, created by one of the biggest leveraged buyouts in history that left the combined and renamed Paramount-Warner Bros. Discovery with nearly $90 billion in debt. That’s a lot to handle even if all went perfectly. But with rising interest rates, there was no question that the company led by David Ellison would be in need of additional equity after pretty much tapping out debt markets.
Malone highlighted Musk’s corporate portfolio as well as the relationship with Skydance backer and Oracle co-founder Larry Ellison, father of CEO David, calling them “very intertwined.” Ellison had invested in Tesla and sat on its board for period.
“Who helped Elon finance Twitter when he bought it? Larry Ellison,” Malone said. “How did Larry Ellison come up with some of the money to put into the creation of Skydance? Tesla stock. And I would not doubt for a minute that before very long you’re going to see an announcement,” he said at the conference Wednesday.
Skydance has tapped other including Laureen Powell Jobs, a member of its newly constituted board of directors. It has been eying wealthy individuals as potential equity partners since before the historic $100-billion deal closed Oct. 6. The company would need more than Musk’s $1 billion to make a dent.
Malone predicted more than an equity stake from Musk, but also a global output deal for Skydance with Musk’s SpaceX, and an SpaceX investment in Skydance. The media company needs to to de-lever as rising interest rates will make it even more expensive to service the massive debt, squeezing free cash flow.
Larry Ellison had personally guaranteed more than $40 billion of the equity financing for Paramount’s acquisition of Warner Bros. A trio of Middle Eastern sovereign wealth funds led by Saudi Arabia agreed to come on as investors, defraying his costs, and will wind up with hefty combined equity stake in the combined company of just under 50%.
Paramount declined to comment.
The usually loose lipped Musk, who also owns SpaceX and X, hasn’t said anything so far today about investing in Skydance. He has been posting repeatedly his opposition to Democrat James Talarico becoming Texas’ next U.S. Senator. Musk has donated millions and millions into the campaign of Trump ally and Lone Star state Attorney General Ken Paxton’s campaign against Talarico.
More to come