Filings show Larry Ellison and a family trust would reimburse Paramount for a $7 billion regulatory fee plus the $2.8 billion already paid to Netflix — as an injunction hearing looms August 3

Company filings disclose that Larry Ellison and a family trust are committed to covering $9.8 billion in fees should Paramount Skydance Corp.’s acquisition of Warner Bros. Discovery Inc. collapse, according to a Bloomberg review of the documents published this week.

The exposure comes in two pieces. Paramount, run by Larry’s son David Ellison, agreed to pay Warner Bros. shareholders a $7 billion termination fee if the deal fails on regulatory grounds. Separately, Paramount paid $2.8 billion to Netflix Inc. in February to clear the streaming company out of the bidding.

The mechanism for reimbursement runs through equity, not cash transfer: Ellison agreed to deliver the $9.8 billion by purchasing new Class B Paramount shares at $16.02 apiece. Paramount currently trades near $8 a share. That is roughly double the market price — a price set when the deal was structured, not when it might be triggered.

Paramount, already carrying heavy debt, would not need to take on new borrowing to fund the fees. The $2.8 billion Netflix payment was made in February using cash on hand and new borrowings, per a public filing, and would ultimately be covered by the $46.7 billion in new equity coming from the Ellisons and their partners — including RedBird Capital Partners and three Middle Eastern sovereign wealth funds — if the Warner Bros. acquisition closes.

Why it is back in the news now

The renewed attention follows Paramount’s agreement last week to push the closing to next June, or five days after resolution of lawsuits brought by 12 states and the Writers Guild of America seeking to block the merger.

On July 20, U.S. District Judge Araceli Martínez-Olguín issued a 14-day temporary restraining order halting the closing of the roughly $110 billion acquisition — the first substantive legal obstacle the deal has faced, even after the Justice Department signed off in June. A hearing on a preliminary injunction, which could push the transaction out by months, is set for August 3.

Delay is not free. A ticking fee of 25 cents per share per quarter begins accruing after September 30 if the closing continues to slip — money paid to Warner Bros. shareholders simply for the passage of time.

The Oracle problem underneath it

The financing rests on a personal guarantee, and the asset behind that guarantee has lost substantial value. Larry Ellison agreed to personally backstop $40.4 billion of the equity financing for the bid. The Ellison Family Trust guarantees $45.7 billion in equity financing, with the backing consisting of roughly 1.16 billion Oracle shares — now worth about half what they were when the pledge was made.

Oracle stock has fallen roughly a third in 2026 and nearly half since early June, cutting about $125 billion from Larry Ellison’s fortune since June 1. His net worth has fallen to roughly $175 billion, down approximately $213 billion from its September 2025 peak near $388 billion, pushing him from second place to around eighth on the global wealth rankings. Forbes has also examined whether Ellison has sufficient liquid assets to meet his guarantee without selling Oracle shares or borrowing further against them.

Two commitments — an AI data center buildout at Oracle and a media acquisition at Paramount — are drawing on the same underlying fortune at the same time.

How the deal got here

Netflix announced in December it would acquire Warner Bros. Discovery’s studios and streaming assets for $82.7 billion. Paramount countered late in February with a $111 billion offer for all of WBD’s assets — the studios, HBO, the streaming platforms, games, and networks including CNN and HGTV — and ultimately raised its bid to $31 per share. The WBD board treated it as the superior offer, and Netflix declined to raise and withdrew.

Earlier in the contest, Paramount had increased its regulatory reverse termination fee from $5 billion to $5.8 billion to match Netflix’s, before the figure reached the $7 billion now in the filings.

What it means beyond Hollywood

Warner Bros. Discovery is a substantial New York employer through CNN and its cable networks, and the outcome determines the ownership of a large piece of the region’s media workforce. A June 2027 closing — or an injunction that stretches longer — leaves those operations in limbo for the better part of a year, which affects hiring, programming commitments and advertising relationships across the tri-state market.

For business owners, the more transferable lesson sits in the deal structure. A $9.8 billion break exposure backed by shares in a single volatile company is a reminder that the strength of any guarantee is only as good as the collateral behind it on the day it is called. Warner’s board made precisely that objection last fall when it argued that a revocable trust was not equivalent to a secured commitment, which is what produced the personal guarantee in the first place.

The August 3 hearing is the next real marker.

JBizNews Desk | New York

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