WBD to Ellison: ‘Show Us the Money’
How much can Larry Ellison really afford to spend helping his son buy Warner Bros. Discovery? That question seems to be at the heart of the WBD board’s rejection of the bid, made through David Ellison’s Paramount Skydance entertainment company. The elder Ellison has promised to backstop the $41 billion in equity financing needed for the $108 billion deal, but he hasn’t personally guaranteed the money, WBD notes in a securities filing.
Moreover, the company points out that there’s a lot unknown about Larry Ellison’s finances. Paramount has said the money would be coming from his trust, which has “financial resources well in excess of what would be required to meet its commitments.” That includes Ellison’s 41% stake in Oracle, which is worth more than $200 billion, Paramount said. (It probably doesn’t help that Oracle’s stock price keeps falling and is now down 46% since late September, amid worries about its AI commitments.)
WBD points out that the creditworthiness of Ellison’s trust “is not certain,” describing it as an “opaque entity whose assets, liabilities, beneficiaries, terms, conditions and limitations are not publicly disclosed.” WBD says it’s not even clear whether the trust owns the Oracle shares. WBD also points out that—as we’ve previously reported—Ellison has pledged about 30% of his stake as collateral for personal loans. One other issue: WBD notes that if any WBD shareholder sues the trust, its commitment to the financing “will automatically terminate.”
Ellison is rich, no doubt about it. But what’s he really willing to put at risk in this deal? We have yet to see.