Larry Ellison’s net worth has been on a roller coaster ride, but the tech titan nevertheless plans to provide a “full backstop” for his Hollywood mogul son’s giant bid to purchase Warner Bros. Discovery, On The Money has learned.
Until recently, David Ellison, with his billionaire father’s support, was seen as the leading contender to buy WBD – the owner of the Warner Bros. studio, HBO and CNN – after he signaled his interest upon completing his $8 billion purchase of Paramount to create Paramount Skydance.
But questions have lately emerged among rival bidders and even inside WBD whether the elder Ellison will play any financing role. That’s because Larry Ellison’s net worth – after soaring to more than $400 billion to make him the second-richest in the world – has tumbled in recent weeks by more than $130 billion amid a broad selloff in tech stocks.
Without Larry’s support, David’s bid – currently at $56 billion – looked shaky to deal insiders given the thin balance sheet of Paramount Skydance.
But people inside the Ellison camp are now quashing such rumblings, telling people close to the deal that Larry Ellison plans to give David’s bid a “full backstop,” which could mean cash support or using his Oracle stock to borrow the funds to make it happen.
“Larry has no problem backstopping David’s bid,” said one person with knowledge of the matter. This person likened Larry Ellison’s recent market losses to a rounding error in his still massive net worth. “There are all sorts of ways Larry can help and he is 100% committed” this person added.
A Paramount Skydance rep declined comment; Larry Ellison didn’t respond to emails for comment.
Larry Ellison’s apparent show of support for his son comes amid a bidding war for the company, known as WBD, which controls the top-ranked studio, No. 3 streaming service, as well as major cable properties.
David Zaslav, WBD’s chief executive, has been shopping his baby to major media and tech outfits including Netflix and Amazon after receiving the bid from the Ellisons’ Paramount Skydance.
David Ellison last bid $23.50 a share, or around $56 billion, but Zaslav is looking for as much as $30 a share, or above $70 billion. He aims to complete a sale of some or all of the company by Christmas. If there’s no deal, Zaslav says he will break WBD into two separate units next year.
The tech market’s recent decline dropped Larry Ellison’s net worth to $267 billion from more than $400 billion in early September – the same time his son made his interest in WBD known.
Investors have begun unloading tech stocks that have benefited from artificial intelligence on worries that AI is facing a valuation bubble. Shares of Oracle are down nearly 30% over the past month.
Earlier in the week, Paramount Skydance’s shares popped on news of more job cuts as it released its first results since the Ellisons bought it from Shari Redstone this summer. Still, the company’s financials remain on the same shaky footing that forced its previous owners to sell.
The company lost money for the quarter and its cash position remains weak at around $3 billion. It has $13 billion in debt. As The Post first reported, private equity giant Apollo is working with Paramount Skydance in terms of debt financing.
Larry Ellison is software giant Oracle’s largest shareholder, the company he co-founded nearly 40 years ago. Over the years he has sold Oracle stock, but only sparingly, often using options and to usually pay his taxes. That has led many to question whether he will do so to finance a WBD purchase.
The elder Ellison, insiders note, didn’t get to where he is by wasting money on dying industries. Oracle began as a small startup but Larry Ellison built it through a series of visionary acquisitions, such as his buyout of Sun Microsystems in 2010. Most recently the company has made a big bet on AI, although it’s now facing a bumpy ride.
As Rich Greenfield, an analyst for LightShed Partners, put it: “If the Ellisons have tens of billions of dollars to spend, they have better ways to create value than buying another legacy media company.”
