PSKY may approach Elon Musk to raise extra funds for WBD deal – reports

Paramount Skydance (PSKY) is reportedly considering approaching tech billionaire Elon Musk to raise additional financing as it prepares to complete its US$110bn acquisition of Warner Bros Discovery (WBD).

Elon Musk

Gage Skidmore via CC

According to a report in business publication Semafor, PSKY execs have discussed approaching Musk to join a syndicate of equity investors.

None of the other potential investors were named in the report, which comes after a 12-state coalition suing to block the deal opted to settle, paving the way for the David Ellison-led company to conclude its takeover of WBD.

There are existing ties between Musk, who owns social media platform X and is the founder of SpaceX, and the Ellison family.

David Ellison’s father, Larry Ellison, who has personally guaranteed around US$40bn of the financing for the WBD deal, has previously invested in several of Musk’s businesses.

In 2022, Larry Ellison invested around US$1bn in X as part of the transaction that saw Musk take it private, while in 2018 he invested in electric car company Tesla.

Raising additional equity investment would likely make sense for the Ellisons and PSKY, given that the combined entity will carry around US$80bn in debt. Paramount declined to comment on the Semafor story.

There would be pros and cons for Musk in joining a financing syndicate backing PSKY. As noted by Semafor, an investment from Musk would represent a meaningful vote of confidence in the combined PSKY/WBD company, while also diversifying the investor base.

However, Musk has become a divisive figure in recent years, and any involvement in the ownership of CBS News or CNN would draw heavy scrutiny.

Another interesting sub-plot involves documentary filmmaker Alex Gibney, whose four-hour documentary about Musk premiered earlier this month in Venice and later screened in Toronto.

Musk has been critical of the project, repeatedly calling it a “hit piece.” He has also threatened to sue Gibney for a suggestion that Musk used his Starlink satellites to interfere with the 2024 American presidential election. Larry Ellison is also cited in the doc.

Earlier this month, Gibney expressed “deep concern” that the TV and streaming release of his documentary, which is backed by HBO, could be in jeopardy if PSKY completed its acquisition of WBD.

Gibney’s suggestion was that HBO may be lent on by its new owners not to release the doc, which is set for a theatrical release next month before landing on HBO in the US early next year.

With the 12-state coalition, as well as the Writers Guild of America, settling their lawsuits, David Ellison said he expects PSKY’s acquisition of WBD will officially close within about 10 days.