Larry Ellison is putting his over $250 billion fortune on the line to bankroll his son’s Hollywood power play.
The 81-year-old Oracle founder has agreed to personally guarantee up to $40.4 billion to backstop Paramount Skydance’s hostile all-cash bid for Warner Bros. Discovery, a move that would mark the single biggest financial commitment of his life and potentially force a reshaping of his vast wealth.
The guarantee, disclosed Monday, is designed to salvage Paramount Skydance’s bid after Warner Bros. Discovery rejected earlier offers as financially unreliable.
The studio had favored a rival cash-and-stock deal with Netflix, citing doubts that Ellison’s backing — previously routed through a revocable family trust — constituted a true backstop.
Ellison’s pledge appears to remove that objection, but it comes with real potential consequences.
Over decades, Ellison built the world’s third-largest fortune by clinging to his massive stake in cloud computing giant Oracle, rarely selling shares and instead borrowing against them to fund investments, real estate and an extravagant lifestyle.
That strategy is now under strain, Bloomberg noted.
Roughly 30% of Ellison’s Oracle stake is already pledged as collateral for personal loans, according to the company’s 2025 proxy statement.
The value of those pledged shares has climbed to about $69 billion, up roughly 25% in the past year, while his unpledged shares are worth another $161 billion.
Ellison’s total net worth stands at more than $252 billion, according to the Bloomberg Billionaires Index, even after Oracle shares retreated from recent highs.
His wealth is still up about $60 billion since the start of the year. Much of that fortune is illiquid.
Turning stock gains into cash to support a $40 billion-plus guarantee could force Ellison to do something he has spent years avoiding: sell Oracle shares or materially reduce his exposure to the company that made him rich.
Oracle’s board has said it does not view Ellison’s pledging arrangements as risky, noting that none of the loans are margin loans and expressing confidence that he could repay the debt without selling pledged stock.
Still, the sheer scale of the Paramount commitment introduces new pressure.
The Post has sought comment from Oracle and Paramount.
The deal would concentrate more of Ellison’s wealth in a business far removed from enterprise software.
If successful, the transaction would shift a significant chunk of his fortune into a heavily leveraged media conglomerate led by his 42-year-old son, David Ellison, whose Skydance Media only recently completed its takeover of Paramount’s parent, National Amusements.
Ellison already shouldered much of the $8 billion needed to complete that acquisition in July.
Paramount’s bid for Warner Bros. Discovery initially relied on financing from partners including the Qatar Investment Authority, RedBird Capital Partners LP and Affinity Partners. The equity portion was to be guaranteed by assets held in Larry Ellison’s revocable trust.
That proposed structure failed to convince Warner Bros. Discovery’s board.
In a Dec. 17 letter urging shareholders to reject the offer, the company said Paramount had “consistently misled” investors by claiming it had a “full backstop,” arguing that a revocable trust was no substitute for a personal commitment from a controlling stockholder.
The revised bid would answer that criticism by putting Ellison’s personal balance sheet directly on the line.
In addition to guaranteeing up to $40.4 billion in equity, Ellison has also agreed to cover potential damages claims tied to the deal.
He has long avoided selling Oracle stock to fund high-profile acquisitions.
Since 2010, he has sold only about $7.5 billion worth of Oracle shares in total, and no more than $1 billion in any single year.
He has also collected roughly $15 billion in pretax dividends from the company.
That discipline paid off handsomely this year, when Oracle shares surged 168% from an April low through mid-September, including a single-day 36% jump on Sept. 10 that briefly made Ellison the world’s richest person.
Those gains have since cooled, but Oracle stock remains up more than 18% for the year.
Ellison’s non-stock assets offer little immediate relief.
Hundreds of millions of dollars are tied up in real estate, art and other hard-to-sell holdings. He spent about $300 million to buy most of the Hawaiian island of Lanai in 2012 and poured tens of millions more into renovating two Four Seasons resorts there.
He also owns commercial properties including the Eau Palm Beach Resort & Spa in Florida, appraised at $203 million, along with hotels and restaurants in California and Hawaii.
All of it underscores the stakes of the Paramount gamble.
Ellison has pledged to give away at least 95% of his wealth under a pledge he signed in 2010.
Before that happens, he may now have to decide how much of Oracle he is willing to risk to reshape Hollywood.
Credit: Source link
