Elon Musk has invested $1 billion in the new Skydance, according to a report from Semafor, amid speculation from Wall Street, industry players and, yesterday, John Malone, that the world’s richest man and Tesla chief would step in to lend a helping hand to his friend Larry Ellison.
At a conference yesterday in New York, the former Liberty Media chief predicted that Musk would shell out about $10 billion to help bail out Skydance, created by one of the biggest leveraged buyouts in history that left the combined company, renamed Paramount-Warner Bros. Discovery with nearly $90 billion in debt. It’s a lot to handle even if everything went perfectly. But with interest rates rising, there was little doubt the David Ellison-led company would need additional equity capital after tapping the debt markets extensively.
Malone highlighted Musk’s portfolio of companies as well as the relationship with Skydance backer and Oracle co-founder Larry Ellison, father of CEO David, calling them “very close.” Ellison had invested in Tesla and served on its board of directors for a time.
“Who helped Elon fund Twitter when he bought it? Larry Ellison,” Malone said. “How did Larry Ellison find some of the money to invest in the creation of Skydance? Tesla stock. And I don’t doubt for a minute that you’re going to see an announcement in a very long time,” he said during Wednesday’s conference.
Skydance brought in others, including Laureen Powell Jobs, a member of its newly formed board of directors. The company was eyeing high-net-worth individuals as potential equity partners well before the landmark $100 billion deal closed on October 6. The company would need more than Elon Musk’s $1 billion to make a dent.
Malone predicted more than a Musk equity investment, but also a global production deal for Skydance with Musk’s SpaceX and an investment by SpaceX in Skydance. The media company needs to reduce its debt load because rising interest rates will make it even more expensive to service the massive debt, reducing its free cash flow.
Larry Ellison 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 have agreed to join as investors, covering its costs, and will end up with a significant combined stake in the combined company, of just under 50%.
Paramount declined to comment.
The usually tight-lipped Musk, who also owns SpaceX and X, has said nothing so far today about the Skydance investment. He has repeatedly voiced his opposition to Democrat James Talarico becoming the next U.S. senator from Texas. Musk has donated millions upon millions to Trump ally and Lone Star State Attorney General Ken Paxton’s campaign against Talarico.
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