Oracle's Founder Backs Paramount, Warner Deal

Oracle co founder Larry Ellison has intervened to personally guarantee US40.4 billion in the latest attempt by Paramount Skydance to acquire Warner Bros Discovery. This substantial financial commitment is intended to secure the prized Hollywood assets and prevent them from being sold to the rival streaming company Netflix. According to Reuters, the guarantee was revealed in a recent filing to address the concerns of the Warner Bros board regarding the reliability of the funding from Paramount. Previously, the perceived lack of full backing from the Ellison family had encouraged the board to consider a rival offer involving a combination of cash and stock from Netflix.

Warner Bros

The amended proposal does not alter the existing all cash offer of US30 dollars per share even as the competition for the extensive Warner Bros library grows more intense. Controlling such a vast collection of content is seen as a significant advantage in the ongoing competition between streaming services for market dominance. As part of these revised terms, Larry Ellison has also pledged not to revoke his family trust or move its assets while the transaction is being processed. Paramount has further increased its regulatory reverse termination fee to US5.8 billion dollars to match the conditions of the competing bid from Netflix.

The timeline for the potential takeover has been extended with the expiration date for the tender offer now set for January 21, 2026. This follows a period where Warner Bros had encouraged its shareholders to turn down a US108.4 billion dollar offer for the entire company including its cable television assets. That earlier rejection was based on financial uncertainties which this new personal guarantee from the Ellison family seeks to resolve. Some investors such as Harris Associates, which is the fifth largest shareholder, have expressed a willingness to consider updated proposals if the terms are improved and contractual issues are addressed.

Market analysts remain cautious about whether these changes will be enough to change the minds of those who intended to vote against the deal. Seth Shafer of S&P Global suggested that shareholders who were planning to vote no likely had concerns beyond the funding guarantee now provided by Larry Ellison. Despite this skepticism, shares in Warner Bros rose by approximately three per cent following the news while Paramount shares saw an increase of more than seven per cent.

A successful merger between Paramount and Warner Bros would create a production studio larger than industry leader Disney and unite two major television operators. Some Democratic senators have raised concerns that such a move would result in one entity controlling almost everything that the public watches on television.

Alternatively, a deal with Netflix would result in a massive streaming entity with a combined total of 428 million subscribers. Netflix co chief executive Ted Sarandos has expressed confidence that their proposal would receive regulatory approval and has promised to honour existing theatrical commitments. They argue that bundling services would provide better value for consumers by lowering costs and help to avoid job losses in an industry currently facing uneven box office returns.

Both potential outcomes are expected to face rigorous antitrust investigation in Europe and the United States. Donald Trump has also indicated that he intends to weigh in on the transactions as lawmakers from both major parties express their worries regarding media industry consolidation.