Larry Ellison, one of the richest people alive, just personally guaranteed $45.7 billion so his son David could buy a Hollywood studio. That's about a fifth of his entire fortune, locked in with an irrevocable pledge he can't undo while the deal is open.
Total price: $111 billion. The Ellison family is putting up the equity, and $57.5 billion in debt is coming from Bank of America, Citigroup, and Apollo. But follow the money trail: AT&T paid almost the exact same price for these same assets in 2018 ($108.7 billion). Four years later, AT&T bailed and sold them for roughly $43 billion, a $47 billion loss for shareholders. So the same HBO, same Warner Bros. studio, same DC Comics, and CNN are being sold for the third time in eight years, at nearly the same price that already wrecked one buyer.
Nine months ago, WBD stock was $7.52. Today it's near $29. That 284% run wasn't driven by better business results. It was driven entirely by a bidding war between Netflix and Paramount that kept escalating until Netflix finally walked away. Netflix stock jumped 13% the moment they dropped out. They'll spend $20 billion making their own stuff instead.
The debt math is something else. WBD already carries about $33.5 billion in debt, mostly inherited from the AT&T era. Paramount is now stacking $57.5 billion more on top. The combined company will be one of the most highly leveraged media companies ever assembled, while the cable TV side of the business (CNN, TNT, Discovery Channel) continues to lose viewers and ad revenue every quarter.
David Ellison founded Skydance in 2006. Only five of its films have crossed $200 million at the domestic box office, three of them starring Tom Cruise. He merged Skydance with Paramount last August. Now he's absorbing all of Warner Bros. Hollywood's Big Six studios, which became the Big Five when Disney bought Fox in 2019. Now the Big Five becomes the Big Four.
The last person who bet $108 billion that they could build a media empire around Warner Bros. was AT&T's CEO. He was off by about $47 billion.
AT&T Lost $47B on This Exact Bundle—Now the Ellisons Are Buying It Back for $111B. Bold Move or Billionaire Ego Trip?
byu/osiris_rai inwallstreetbets
Posted by osiris_rai
6 Comments
Att also lost yuge on directv
Ego trip. Netflix or Disney is going pick this up for pennys on the dollar in a few years
This is about oligarchical control, period.
It isn’t about the money it is about the control. I mean it is a little about the money but mostly about the control
All this for fuckin harry potta
Oracle had a nice tidy business essentially milking IP licensing in perpetuity. Now they’re loading up on debt to speculate on AI. TikTok and Warner Bros. are way outside their wheelhouse and almost entirely being done for flippant political reasons.
Granted all of this individually is a small fraction of Ellison’s wealth but put it all together and it could be a mess especially if the AI trade continues to flounder. It could leave Oracle with a mountain of debt and unprofitable business lines if mishandled even a little.