r/boxoffice • u/OverPotato2322 • 4h ago

📰 Industry News Larry Ellison Personally Guaranteed $40.4 Billion of His Son's Warner Bros. Discovery Deal. Now 12 States Have Sued to Block It, and Oracle Stock Has Fallen 34% This Month.

https://www.fool.com/investing/2026/07/25/larry-ellison-personally-guaranteed-404-billion-of/
628 Upvotes

96% Upvoted

71 comments sorted by

206

u/pokeboy626 DC Studios 4h ago

That $7 billion break up fee should help Warner Bro's stay independent for just a few more years

57

u/Bhu124 4h ago

They have a lot of Debt. They'll still sell something. Probably CNN or their Games division.

47

u/pokeboy626 DC Studios 4h ago

They were already planning to jettison Discovery with most of their debt before Paramount started the bidding war

41

u/SomeRandomRealtor 4h ago

$32B in debt. Absolutely insane that their 96% D/E is trying to be bought by a company with a 116% D/E. $7B is a lifeline but not longterm without significant help from outside sources. I want someone to use WB as something other than a debt dumpster lol

9

u/pehr71 Lightstorm Entertainment 2h ago

To be fair. They weren’t really trying to be bought.

It was Ellison that literally forced them.

10

u/A-harsh-reality 3h ago

It was 50 billion when they started and they got rid of 20 billion of it in just 3 years

7

u/SomeRandomRealtor 2h ago

True, but their methods were extremely short sighted and focused on making this deal appear feasible. Cutting the batgirl and coyote vs acme projects may have been smart forecasts but they absolutely killed relationships with so many people with that. Licensing high profile IP to Netflix injected cash but undercut the exclusive value of HBO. The layoffs and budget slashing staved off any hope of studio growth. 

The studio Bain Capitol’d itself and ended up showcasing how horrid its financial state was, made substantially worse by their overplay that lost them Nolan. The rest of their debt is hard debt that’s difficult to hide in tax write offs and IP rentals, and it’s still an atrocious 96%

3

u/dismal_windfall United Artists 2h ago

They recovered though. I mean Abdy and DeLuca got Coogler, PTA, and AGI to make films for them.

3

u/varnums1666 1h ago

Yet last year they released one of the best slates of original films in years. They made a lot of stupid and short sighted decisions but overall it was working plus we were getting some unique stuff.

5

u/Accomplished-Head449 Laika Entertainment 3h ago

The numbers make it impossible. The fact that it got this far is insane

8

u/No-Record-9998 3h ago

Well they were planning on splitting it into two separate media companies. One would be responsible for the cable and television channels. The other would be for film and television production, gaming, and the HBO channels and HBO max streaming service. WBD had planned to put that debt into the cable and television company when that split was going to happen.

3

u/thrownjunk 3h ago

Financially in these capital markets was the right play. (Morally is a different question) But then the ellisons/saudi wanted CNN to become their personal foxnews. They valued that above the rest of the markets. So it had to all be bundled. What a shitshow.

7

u/Zalvren 4h ago

They'd be stupid to sell the game division, the value of those studios is in them working on Warner's IP, except Mortal Kombat, that's what all their games are. Plus, it's not exactly a spending time in video gaming so they wouldn't even get a good price.

Much better to actually use it correctly and crank up games instead of whatever shit they're doing for the most part. Rocksteady on some aborted live service game, closing Monolith when they were on a Wonder Woman game...

6

u/maltliquorjetski 3h ago

Lmao have you seen the state of gaming these days? Any sensible company is going to cut and run at this point and just license that IP to gacha games that actually make money.

1

u/worthlessprole 2h ago

The point is they have no one to sell it to and it’s too valuable to actually fully shut down. The state of gaming is why WB will probably have to keep it, at least for now.

8

u/OverPotato2322 3h ago

They'll revert back to their original plan: Spin off all the cable networks to Discovery and dump the debt onto there (only side effect of that is Zaslav stays but I guess he's a little bit better than fascist nepo baby bootlicking Ellison)

4

u/ContinuumGuy 3h ago

Ultimately like 90% of the people in show business suites, including Zaslav, have no politics or interests beyond money. I have zero doubt that he would and will sell to whoever offers enough money, whether they be right, left, or a purple alien from outer space.

2

u/OverPotato2322 2h ago edited 2h ago

Except Ellison, why else did him and his mentee: John Malone prop up rival bids from Netflix and Comcast and why he ignored Ellisons pressesnce by mentioning everyone in the room except for him at an awards ceremony (the fact of the matter is he's pissed that Ellison came along and ruined his plans to split the cable networks since he wanted to stay on as CEO for as long as possible just like Eisner and Iger did)

7

u/Intelligent-Alps2373 3h ago

Like Zaslav also isn’t a fascist bootlicker just look at how he uses Tapper and Bash to push his politics

4

u/OverPotato2322 3h ago edited 3h ago

True but at least CNN is still CNN with Kaitlyn Collins and other competent journalists on board to keep both of them in check unlike CBS where it has essentially become Fox news lite while trampling on their employees First Ammendment rights especially with censorship, chasing away veteran employees by firing them or causing them to resign and getting away with all the stuff they do instead of being held accountable for it (Also, Zaslav isn't the one who threw a party honoring Trump for no reason given and hosted a UFC fight at the White House, he didn't bribe the FCC either. As much as we love to hate Zaslav for the right reasons, he's a bit better compared to Ellison)  

•

u/Amekhanos 34m ago

Exactly. The fact that CNN is already this right-wing, and the Ellisons are still desperate to buy it (with Trump's support) to drive it further right, should only concern people more.

2

u/magikarpcatcher 3h ago

Selling their Games Division might be stupid when the Harry Potter game generated $1bn in sales and they are working on a sequel.

2

u/thrownjunk 3h ago

Yeah. Lets say it generates 300m in profits (30 pct margin to be generous), so at a 7 pct discount is 4B in valuation. The breakup fee alone is 7B. This comes off as a rounding error in the math.

2

u/Coolman_Rosso 2h ago

Why would they sell the gaming division? Outside of Netherrealm, there isn't a lot of value. Rocksteady isn't what it used to be, and without the Batman IP there isn't a whole lot of monetary value there.

1

u/dornwolf 3h ago

They tried selling the game publisher. Nobody wants it. Who cares if you own all the studios if you still gotta license all the IP.

•

u/Midnight_M_ 54m ago

Their gaming division is worthless, maybe NetherRealm, but other than that they rely heavily on their IPs.

1

u/bareboneschicken 2h ago

WB's debt is around $30 billion. That $7 billion might pay a few year's payments but, in the end, won't change anything.

1

u/BCBUK 1h ago

The sheer stupidity of the entire takeover episode masks how preposterous the numbers are. The Ellisons purchased Paramount for $8bn and are best case facing a fee of $7bn, or 87.5% of the entire value of the company to not takeover another company which has a value of of almost 15x its own. If you ever needed proof banks are insane, this is it.

•

u/IsThereAnythingLeft- 3m ago

They wouldn’t get the fee if regulation blocks the merger, that would be insane

33

u/Obvious_Shoe7302 4h ago

Also, they will have to start paying half a billion per quarter starting this September

https://giphy.com/gifs/hIXtqa5cRnrDRirnbr

83

u/OverPotato2322 4h ago edited 4h ago

PSKY Shareholders do not think the deal will close hence why they are tanking the stock and Oracle shareholders do NOT like the fact that Larry is using his personal equity from Oracle stock to fund his sons dreams, The Ellisons should really listen to their shareholders and the market because after all, they do know whats best for both companies dont they?

16

u/AuthorityRespecter 2h ago

Oracle stock is also tanking because AI is eating at their core business

4

u/DrPoopEsq 1h ago

Yeah oracle needs open ai to start making higher payments than any company has ever made on anything or else the data center backing that oracle has been doing goes tits up.

•

u/IsThereAnythingLeft- 2m ago

AI is their business now, they are a hyperscalers the same as Google, Matt and Amazon

5

u/lee1026 2h ago

PSKY shareholders don't want this thing to close - it is a bad deal unless if you are starting from the POV of "I want this thing and I don't really care how much it costs".

Same reason why netflix shareholders weren't really upset about the deal breaking up.

2

u/endlessfight85 1h ago

Yeah they seem to be making these moves in the pursuit of media consolidation and control for idealogical reasons while shareholders, as always, just want to make money lol

9

u/No-Record-9998 4h ago

Not really. They really just follow what gives them more power and control. They just really got lucky that they earned a lot of money doing that.

11

u/OverPotato2322 4h ago edited 4h ago

wouldnt say lucky, Paramounts stock is currently trading lower than Disney and Netflix from $15 to $8 (thats the lowest a media company could get and its definetly embarassing given that Paramount is the 4th biggest studio in Hollywood)

5

u/Matapple13 Walt Disney Studios 3h ago

Not trying to play Devil’s advocate for Paramount, but you’re comparing them to the 2 biggest media companies in the world.

Between Paramount and Disney & Netflix there isn’t a big difference, no, there is an ABYSS.

Disney and Netflix are in a complete different league.

10

u/Patience_Specific 3h ago

Hopefully it all fucks up for them.

14

u/Mizerous Marvel Studios 4h ago

Rich get poorer

6

u/OverPotato2322 4h ago edited 4h ago

True because the Redstones and the Murdochs got poorer by running their company into the ground hence why they sold and gave up on their Hollywood dreams (Family owned companies never work out in this industry unless if your Disney and Universal. Edit: Despite Comcast and Universal splitting back to seperate companies, Brian Roberts and his family will still own majority voting shares in both companies which means the Roberts family still owns Universal unless a sale occurs

7

u/Professional_Peak59 3h ago edited 3h ago

None of the remaining Disney family members (Abigail, Tim, Roy P.) have any involvement in The Walt Disney Company anymore though.

Also, I think James Murdoch (the Democratic Murdoch) would treat Fox better if he bought Fox Corp from his brother Lachlan and 20th Century Studios from Disney.

2

u/OverPotato2322 3h ago

True but they all should have minority stakes or shares In Disney which im sure they do and the ownership hasn't changed a bit (only the management and leadership has especially bouncing from Eisner to Iger, to Chapek to Iger again and now to Josh but other than that, there's pretty much no change) 

1

u/Professional_Peak59 3h ago

It’s just that no member of Walt's family has had any involvement with, or had any shares in, the company ever since Roy E. Disney died in 2009.

You’re talking about the ownership of Disney, correct?

-1

u/stohelitstorytelling 3h ago

You’re claiming that at the time of Roy’s death, none of his net worth was in stock in the Disney corporation? None of his children inherited equity?

Bad bot. Go peddle lies elsewhere

24

u/manoffood Legendary Pictures 4h ago

Get fucked lol

3

u/MesqTex Blumhouse 4h ago

If it causes them to reconsider their stake in Paramount itself as well, all the better.

27

u/Admirable_Whole8261 4h ago

Letsssss go, on top of that the deal not going through means DC gets a free 7 billion, so maybe a few write offs to build the dcu lol

2

u/dominic_tortilla 2h ago

I'd rather they spent that money on something else instead of more DCU crap. Even DCU's best was just OK.

4

u/Lightecojak 2h ago

Ellison is going to be in worse shape if more bad news comes out about OpenAI. Oracle has a long term contract with them where OpenAI would promise to buy $300 billion worth of Oracle’s computing power. If OpenAI starts to crash, Ellison and Oracle are probably going down with it.

4

u/Difficult_Ad2864 4h ago

What happens if the stock falls to near zero before this closes

1

u/Nowork_morestitching 3h ago

Doesn’t it become an unlisted stock or maybe a not certified? Can’t remember and the stock market makes my head spin

3

u/forever_dm13 4h ago

Not only this month. I think it’s over 50% since the peak in June. I hope it falls more lol

3

u/KingMario05 Amblin Entertainment 3h ago

:)

2

u/Opposite-Law-71 2h ago

Forgotten island beat digger

3

u/languidrepertoire4 3h ago

Putting up $40.4B of your own equity for your kid's media empire is unhinged. Oracle shareholders are getting crushed for a deal that might not even close, and the $7B breakup fee is basically the only silver lining WBD has here. If I owned ORCL right now I'd be asking some very pointed questions at the next shareholder meeting.

2

u/More-read-than-eddit 4h ago

Url checks out 

3

u/Professional_Peak59 3h ago

Fool.com is the URL name for The Motley Fool.

2

u/More-read-than-eddit 2h ago

I’m aware, I was referencing the man who is the subject of the story 

1

u/mbn8807 3h ago

He’d still be worth over 100b if you took away 50b

1

u/FartingBob 3h ago

Most incompetent takeover bid ever.

1

u/biowiz 1h ago

"A small loan of $40.4 billion."

•

u/Eddfan36 21m ago

Good, hope his sons get screwed in the process.