Paramount executives are considering whether to seek an investment from Elon Musk as the studio prepares for its proposed combination with Warner Bros, according to a report by Semafor, writes The Hollywood Reporter.
Musk has emerged as one of several wealthy individuals being considered by Paramount CEO David Ellison as a potential member of an equity investor group in the combined company. The discussions remain preliminary, and the potential size of Musk’s investment has not been disclosed.
The talks follow a settlement that resolved antitrust lawsuits filed by a dozen states, led by California, as well as the Writers Guild of America, which had sought to block Paramount’s $111 billion bid for Warner Bros.
The deal is expected to create a major Hollywood entertainment and media company, but its financial structure would leave Paramount with more than $80 billion in debt and around $3 billion in annual free cash flow.
A significant portion of that cash could be directed towards interest and debt payments, potentially leaving less funding available for films and television productions.
The transaction was initially backed by about $46.7 billion in equity financing from Larry Ellison and RedBird Capital. The financing was later expanded to include investors such as Saudi Arabia’s Public Investment Fund, the Qatar Investment Authority and Abu Dhabi Investment Authority.
Paramount is now considering whether Musk would contribute to the existing $46.7 billion commitment or participate in an entirely new equity raise. Bringing in another investor could spread the financial exposure while providing the company with additional capital for operations.
Under the settlement, Paramount and Warner Bros. will also be required to meet annual film quotas. Financial penalties and possible divestitures could follow if the companies fail to comply with the terms.
Earlier this month, Larry Ellison cancelled plans to sell up to $7.5 billion worth of Oracle shares. No reason was given for the decision to withdraw the proposed sale of 50 million shares.
Ellison and Musk have maintained longstanding ties. Ellison invested $1 billion in Musk’s acquisition of X in 2022.
An investment by Musk could provide Paramount with additional equity without increasing its debt burden. However, his potential involvement could also raise questions about editorial independence, as the combined company would own CBS News and CNN.
