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American billionaire Elon Musk has invested about $1 billion in Skydance, the Hollywood company controlled by Oracle co-founder Larry Ellison and his son David, people familiar with the matter said on Thursday.
The money gives fresh equity to a company that is carrying a heavy debt load after it completed its $110 billion takeover of Warner Bros. Discovery on Oct. 6. Skydance, previously called Paramount Skydance, now owns Paramount Pictures, Warner Bros., HBO, CBS, CNN, Nickelodeon, MTV and TNT Sports, and is under pressure to cut costs and lift its share price.
Musk's investment came at around the same time as new equity contributions from other Skydance backers, including board member Laurene Powell Jobs, the people said. It is not clear whether Musk invested personally or through one of his companies, or how large a stake the money buys. Skydance declined to comment, and SpaceX did not respond to a request for comment.
A debt-heavy merger
Skydance raised $47 billion in new equity at $12 a share to help pay for Warner Bros. Discovery. The Ellison family, RedBird Capital Partners, Saudi Arabia's Public Investment Fund and the Qatar Investment Authority were among the investors, while Bank of America, Citigroup and Apollo led the debt financing. Larry Ellison personally backed more than $40 billion of the equity.
Warner Bros. Discovery shareholders received about $31.02 a share in cash. The combined company's net debt stands at about $78.9 billion on a pro forma basis. Skydance has promised at least $6 billion in annual cost savings within three years and aims to bring its net leverage down to three times earnings before interest, taxes, depreciation and amortization by the end of 2029.
The shares have struggled since the deal closed. Skydance trades on the New York Stock Exchange under the ticker SKYD, and the stock has fallen well below the $12 a share that equity investors paid less than a month ago.
David Ellison, Skydance's chairman and chief executive, runs the company with co-CEO Ynon Kreiz, the former Mattel chief. They are combining the Paramount+ and HBO Max streaming services and folding together two large cable-network businesses.
Old ties between Musk and Ellison
Musk and Larry Ellison have backed each other for years. Ellison bought Tesla shares in 2018 and sat on the carmaker's board until 2022. He also put $1 billion into Musk's $44 billion purchase of Twitter, now X, in 2022. Musk has praised the Ellisons and Skydance in public.
Skydance first considered Musk as an equity investor in September, when David Ellison was looking at several wealthy backers.
The investment has fed talk of a wider deal between Skydance and Musk's SpaceX, whose Starlink satellite service could carry Skydance's channels and films around the world. Cable billionaire John Malone predicted on Wednesday that the two sides would strike a cross-investment worth $8 billion to $10 billion, possibly with a global distribution partnership. "I think there's a deal coming there," Malone said at a Paley International Council Summit event. "I would not doubt for a minute that before very long, you're gonna see an announcement."
Neither company has announced such a partnership.
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