Paramount weighs asking Elon Musk to join investor group as Warner Bros deal nears close

Paramount chief David Ellison is considering asking Elon Musk to put money into Paramount.

Variety reported the idea on 23 September, citing reporting by Semafor. Semafor said Musk is one of several wealthy individuals Ellison has considered for a syndicate of equity investors, meaning a group pooling cash to back the company. That detail rests on unnamed sources.

Semafor also reported that the size of any possible Musk investment could not be learned. Paramount declined to comment on the report. Variety noted Forbes estimated Musk’s net worth at $950 billion.

The fundraising links to Paramount’s planned $111 billion deal for Warner Bros. Discovery. Larry Ellison, David Ellison’s father, has personally guaranteed $46.7 billion in equity financing for the deal, according to Variety. Paramount has also lined up $24 billion in commitments from the sovereign wealth funds of Saudi Arabia, Qatar and the United Arab Emirates, which are state-owned investment funds.

Paramount has said those three funds would own 38.5% of the combined Paramount-Warner Bros. The Federal Communications Commission, the US broadcast regulator, has approved Paramount’s request to allow up to 49.5% of its equity to be held by foreign entities if the merger goes ahead.

The Ellison and Musk camps know each other. Larry Ellison put $1 billion into Musk’s 2022 deal to take Twitter private. He also invested in Tesla in 2018 and sat on its board for several years.

The merger itself is close to a decision point. Paramount has reached a settlement with 12 state attorneys general to resolve their antitrust lawsuit, meaning a legal challenge that the deal would harm competition. A judge has scheduled a hearing for Thursday to review the proposed consent decree, meaning the court-approved terms for ending the case. If approved, the merger is expected to close in about two weeks.

David Ellison told staff in a letter that he intends to close the Warner Bros. deal in that two-week window, according to The New York Times. Closing by 30 September would also let Paramount avoid a $7 million daily fee, Al Jazeera reported.

The state settlement carries production and property conditions. Paramount cannot sell the Paramount Studios or Warner Bros. lots for at least five years. It must also spend at least an extra $300 million a year on US film production, totalling $1.5 billion over five years.

The path has been long. Paramount Skydance offered $30 per share for Warner Bros., and Warner Bros. Discovery had earlier planned to reject the approach from the Ellisons and Paramount Skydance. David Ellison had still said he expected to close the merger even after a federal judge set a March trial date for the deal.

What makes this stand out is the mix of money and deadlines. A possible Musk cheque is still only a consideration. The court date and the end-of-month fee deadline are fixed.