Tech Mogul Larry Ellison Leverages His Nepo Son to Takeover Paramount (77.5% Ownership Stake)

Well today, in things I did NOT have on my 2024 BINGO card: Larry Ellison, the Oracle of Silicon Valley has decided that running one of the world’s largest software companies and amassing a fortune north of $100 billion just isn’t enough. So, what’s a bored billionaire to do? Apparently, the answer is to take over Hollywood.

(Source: Yahoo Finance) 

Yep, you heard that right. The 78-year-old tech mogul is set to become the controlling shareholder of Paramount Global, the media behemoth that brought you everything from CBS’s nightly news to the “Mission: Impossible” franchise. And he’s doing it in the most Ellison way possible: by funneling $6 billion through a Byzantine maze of investment vehicles that only a billionaire (and his nepotism son) could love.

(Source: The Wrap) 

For those of you catching up here, the corporate season of “The Bachelor” officially came to an end last month as Paramount will officially be merging with Skydance Media, (think, Top Gun Maverick, where Tom Cruise once again defies the laws of aging) - who by the way is also founded and operated by Ellison’s 40-year old son, David. 

The deal details are that Skydance is set to acquire Paramount for a cool $8 billion, and when the ink dries, Daddy Ellison will own 77.5% of National Amusements Inc., the holding company that’s been the Redstone family’s iron grip on Paramount for decades.

(Source: The Wrap) 

Again, for those of you not up to speed, the Redstones are like the real life version of “Succession”, aka the family behind ViacomCBS and one of the most storied names in American media. 

(Source: Giphy) 

And now, Shari Redstone, daughter of the late Sumner Redstone, is cashing out with $2.4 billion in proceeds, which, let’s be honest, probably feels like a consolation prize when you’re giving up control of the empire your father built. But alas, with Larry Ellison’s son, David, set to take the CEO seat, expect a shake-up that makes Game of Thrones look like a tea party. And if the past is any indication, “shake-up” is putting it mildly.

(Source: Giphy) 

For starters, Jeff Shell, the former NBCUniversal CEO who was unceremoniously booted from Comcast last year, is making a grand comeback as a senior executive in the new Paramount-Skydance entity. Because nothing says “fresh start” like bringing in a guy who was shown the door at his last gig.

In addition, word on the street is that Ellison is set to orchestrate a major cost cutting, because you know, billionaires can’t resist the urge to “trim the fat” once they get their hands on a new toy.

(Source: Hollywood Reporter) 

 Meaning, for those of you who have enjoyed Paramounts lavish spending on its original content (see: Paramount +), well, you might want to savor it while you can. Because, now with the Ellisons in charge, they will likely be more interested in turning a quick profit than funding the next Yellowstone (or any other drawn out masterpiece by Taylor Sheridan… for the time being). 

(Source: Flickering Myth) 

But despite the changes that David Ellison (Larry’s son) is set to make on the media giant, the elephant in the room is how Larry Ellison will be faring with this deal. As we all know, Larry is already one of the most outspoken and politically conservative figures in Silicon Valley, so his acquisition of one of America’s most influential media companies is sure to ruffle some feathers like Donald Trump disrupted politics.

(Source: Giphy) 

The FCC filing promises that the new ownership will “preserve and enhance” CBS’s news operations, but critics are already sharpening their knives, worried that Ellison’s influence could skew the network’s coverage.

(Source: Hollywood Reporter) 

If that sounds familiar, it’s because we’ve been down this road before. It’s the classic billionaire playbook: Buy up a media empire, promise to be “hands-off,” and then slowly start steering the ship in a direction that just so happens to align with your interests. Which I guarantee will happen and leads me back to the little guys… aka Paramount’s current shareholders. 

Well, for those curious, investors are getting the short end of the stick here, as usual. The deal offers existing public shareholders $23 per share for Class A voting stock, which is not that much considering Class A shares are currently sitting at $22 (legit sounds like a participation trophy win). 

(Source: Reuters) 

The other option is that existing public shareholders can take $15 per share for Class B non-voting shares, (for a nice 44% gain from current levels), OR they can roll their holding into the new company… for whatever the heck that price will be. But regardless of whether investors will take cash or stock, let's all just concede to the fact that their stakes are about to get diluted faster than a cheap cocktail at a “Lisa Frankenstein” (the biggest box office flop of the year) after-party. 

(Source: KJZZ) 

So with all of that said, what’s the takeaway with this wild twist with Paramount? Well, on one hand, we’re definitely witnessing the end of an era as the Redstones bow out of the media empire they spent decades building. On the other, Larry Ellison is about to become the most powerful man in Hollywood, and he didn’t get there by playing nice. 

(Source: Britannica) 

Now obviously, only time will tell if David and Daddy Ellison can recover Paramount from its latest financial struggles, like a net loss of -$5.4 billion in Q2 (derived from the companies cable networks). Buf if there’s one thing we know about Larry, it’s that he doesn’t do anything halfway. So investors definitely have that silver-lining going for them, I guess. 

(Source: Giphy) 

But, but, but…

In the meantime, as we await to see what Paramount’s future will end up being, why worry about the media giants comeback when the last FIVE of our Stocks.News alerts all exploded to peak moves of +110%, +185%, +110.10%, 162% and +300%... in LESS than 48 hours?! Incredible right? Our premium members have absolutely been eating the past few weeks, and with the anxiety of rate cuts looming in September, our next alert today is set to be even more explosive. 

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In the meantime… stay safe and stay frosty, friends! Until next time…

Stocks.News does not hold positions in companies mentioned in the article.