Rumor has it that Musk spent a billion dollars to invest in Skydance (SKYD.US), the latter faced a debt burden of nearly 80 billion US dollars

The Zhitong Finance App learned that according to people familiar with the matter, Tesla (TSLA.US) CEO Musk has invested about 1 billion US dollars in US media giant Skydance (SKYD.US). The investment comes at a time when Skydance has completed the acquisition of Warner Bros. Discovery (WBD) and is beginning to integrate its huge film, television, and streaming business. Facing a debt burden of nearly $80 billion, the company is actively seeking new equity financing to support business consolidation and cost reduction plans.

As of the time of reporting, neither Musk nor Skydance representatives had immediately responded to media requests for comment. Skydance shares fell about 1% on Thursday.

On October 6 of this year, Paramount officially completed the acquisition of Warner Bros. Discovery. The merged company adopted Skydance as the company name. The deal combines two of Hollywood's biggest movie studios, Paramount Pictures and Warner Bros. Pictures, as well as two major streaming platforms, Paramount+ and HBO Max. At the same time, the new company also has a huge television network business, two major news departments, and a large number of corporate management functions. How to effectively integrate these businesses has become a major challenge facing management today.

Skydance Co-CEOs David Ellison (David Ellison) and Ynon Kreiz are responsible for driving this complex integration process. The company said earlier that it is expected to achieve cost savings of 6 billion US dollars within the next three years, mainly improving operational efficiency through business integration and reducing repetitive expenses.

However, the huge amount of debt is still an important financial pressure facing the company. Skydance is currently burdened with nearly $80 billion in debt. While promoting cost reduction, it also needs to ensure that its film production, streaming and television businesses have sufficient capital to maintain operation and development.

In this context, Musk's equity investment of about 1 billion US dollars will provide Skydance with new capital support, and also highlight the long-standing commercial ties between Musk and the Ellison family.

David Ellison's father is Larry Ellison, co-founder of Oracle (ORCL.US). The latter has had an investment partnership with Musk for many years. In 2022, when Musk bought the social media platform Twitter (now renamed X) for $44 billion, Larry Ellison invested $1 billion to support the deal. Additionally, Larry Ellison invested in Tesla in 2018 and served as a member of the company's board of directors.

Larry Ellison also played an important role in Paramount's deal to acquire Warner Bros. Discovery. He provided personal guarantees for more than $40 billion in equity financing for Paramount's acquisition plan to provide financial support for the completion of the transaction. Today, as Musk injects about 1 billion US dollars into Skydance, the capital cooperation between the two sides has been further extended to the film, television, entertainment and media industry.

For Skydance, this investment helped it to supplement equity capital at a critical stage of consolidation, but compared to the debt size of nearly $80 billion, the $1 billion capital injection is still limited. In the future, the market will focus on whether Skydance can achieve its goal of saving $6 billion over three years as scheduled, and whether the company can gradually ease heavy debt pressure through further financing, improved cash flow and business integration.