Few people have taken more shots at the news media than Elon Musk.
He has spent years attacking mainstream outlets on X, the social media platform he bought in 2022. Now he may own a slice of two of the biggest names in American news.
That is not as strange as it sounds once you follow the money. The world’s biggest media deals now run on billionaire checks, and the billionaires in this one have been backing each other for years.
It also matters beyond the headlines. The same company that owns these newsrooms sets the price of two streaming services millions of households pay for every month.
And if you own the stock, the price paid by the newest investors tells you a lot about where it may be headed.
Musk has invested about $1 billion in Skydance (SKYD), the media company led by David Ellison that owns CNN and CBS News, Semafor reported on Oct. 22, according to The Telegraph. The investment gives Musk an indirect stake in both networks.
Neither Musk nor Skydance has confirmed the deal. A Skydance spokesperson declined to comment, and a Musk representative did not respond, Variety reported.
What Semafor reported about Musk’s $1 billion stake
Skydance was formed from the roughly $111 billion merger of Paramount Skydance and Warner Bros. Discovery, Variety reported. The deal closed on Oct. 6 and brought CNN, CBS, HBO, Warner Bros. and Paramount Pictures under one roof.
The combined company is huge: Its annual revenues are roughly $70 billion and it has more than 200 million streaming subscribers, CEOWORLD reported.
That deal also left the company carrying a heavy load. Skydance has some $80 billion in net debt and is targeting $6 billion in cost savings over three years, Variety reported.
The move did not come out of nowhere.
Last month, Semafor reported that David Ellison was considering reaching out to Musk to “become part of a syndicate of equity investors into Paramount,” according to Variety.
Musk’s money arrived as Skydance sought fresh cash from other investors, including board member Laurene Powell Jobs, according to Semafor’s report as described by The Telegraph.
Here is what remains unclear, according to coverage of the report:
- Whether the money came from Musk personally or from SpaceX, Benzinga reported.
- The share price Musk paid and the size of his resulting stake, which have not been disclosed, CEOWORLD reported.
- Whether the deal comes with any distribution or content partnership. None has been announced.
In my analysis, $1 billion is a small check for a company this size. It equals about 2% of the $47 billion Skydance raised in new equity to fund the Warner deal.
Why Larry Ellison and Musk keep backing each other
The relationship runs deep. Larry Ellison, the Oracle co-founder and David Ellison’s father, put about $1 billion into Musk’s $44 billion Twitter takeover in 2022, Variety reported.
More on the Paramount-Warner deal:
- Paramount just offered up its crown jewel
- Skydance just raised prices. Here’s what’s happening next
- Paramount’s Warner merger has a new power play problem
Ellison also invested in Tesla in 2018 and sat on its board from 2018 to 2022, Benzinga reported. He personally guaranteed more than $40 billion of the equity behind the Warner deal.
Media veteran John Malone saw it coming. “These guys are very intertwined,” the former Liberty Media chairman said of Ellison and Musk at a Paley Center event, Variety reported.
Malone even floated a much bigger number. He suggested SpaceX could invest “$8 billion or $10 billion” in Skydance and predicted a “global output deal” for its content, according to Variety.
The Telegraph described Musk’s investment as repaying a favor. Malone also said Ellison raised some of the Warner money using Tesla stock, and added, “I would not doubt for a minute that before very long you’re going to see an announcement,” according to Benzinga.
Does Musk get a say over CNN and CBS News?
Not on paper. The Ellisons and RedBird Capital own 100% of Skydance’s voting shares, Variety reported, so a minority investor buying ordinary equity would not get a vote on how the company is run.
CNN’s chief executive has said the network’s independence will hold. Skydance’s leaders “both understand and will fully support the principle and practice of the kind of independent news that CNN has always stood for,” CEO Mark Thompson said, according to The Telegraph.
There is one awkward detail. Skydance’s HBO Max holds North American streaming rights to “Musk,” a documentary the billionaire has publicly criticized, Benzinga reported. The film has a 97% Rotten Tomatoes score.
Director Alex Gibney has said Skydance representatives assured him the film would air on HBO next year, CEOWORLD reported. That gives investors and viewers a simple early test of whether the new shareholder changes anything.
What the Musk investment means for people who own Skydance stock
This is the part I’d focus on if you hold the shares or are thinking about buying. The biggest backers in Skydance’s equity raise paid $12 a share, including the Ellison family, according to 24/7 Wall St.
The stock closed at $7.10 on Oct. 20, about 41% below that price, 24/7 Wall St. reported. Powell Jobs’ roughly $250 million stake was showing a paper loss of about $102 million.
The slide has been fast. Shares fell almost 24% on Oct. 14 alone, the day they began trading without warrants attached, 24/7 Wall St. reported.
Analysts are cautious. Their consensus rating is Hold, with an average price target of about $8.87, CEOWORLD reported.
A famous name on the shareholder list does not fix a balance sheet. What matters for your money is whether Skydance can cut that $80 billion debt load and hit its savings target.
What the Musk investment means for HBO Max and Paramount+ subscribers
If you pay for streaming, the ownership story matters less than the bill. HBO Max and Paramount+ subscribers already face higher prices after the merger, TheStreet reported.
A company with this much debt has every reason to keep raising prices and bundling services. Musk’s money helps at the margin, but it does not change that math.
Watch for any distribution deal between Skydance and Musk’s companies. Malone’s prediction of a “global output deal” would be the bigger story if it happens.
Until then, keep your focus on the things you control: what you pay each month for streaming, and how much of your portfolio rides on a heavily indebted media company.
For now, Musk owns a slice of CNN and CBS News on paper. The people who control those newsrooms, and the price of your streaming plan, are still named Ellison.
Related: Skydance’s just raised prices. Here’s what happening next