Billionaire Elon Musk has invested approximately $1 billion in Skydance, the newly combined entertainment company formed through Paramount’s acquisition of Warner Bros Discovery (WBD) earlier this month.
The investment was reported Thursday by CNBC, which cited a person familiar with the transaction who was not authorized to discuss the matter publicly. Confirmation from CNBC followed an unconfirmed report published by a newsletter earlier in the day, before Skydance informed federal regulators about the investment.
The financial commitment comes as Skydance seeks additional equity investments while navigating the integration of two major Hollywood studios and a substantial debt burden.
Paramount completed its acquisition of WBD on October 6, combining the companies under the Skydance name.
The transaction brought together Paramount Pictures and Warner Bros, along with their respective television production operations, streaming platforms and extensive portfolios of cable television networks. Skydance also oversees Paramount Plus and HBO Max, two major subscription streaming services that compete with Netflix, Disney Plus and other direct-to-consumer entertainment platforms.
Skydance has outlined plans to achieve approximately $6 billion in cost savings over three years, primarily through the consolidation of overlapping operations and corporate functions. Those efforts come as the company faces nearly $80 billion in debt associated with its expanded entertainment operations.
The investment made by Musk on Thursday is likely a play for spectrum: The tech mogul oversees SpaceX, including its Starlink business, which uses licensed radio frequencies to deliver two-way broadband Internet connections over low-earth orbit (LEO) satellites.
Spectrum is a finite resource, licensed and regulated by the Federal Communications Commission (FCC). Skydance owns more than two dozen local TV broadcast stations across the country, each of which is licensed to transmit on radio frequencies reserved for TV signals, but commercial broadcasters have pushed the FCC to approve a change in the transmission technology that will allow them to relegate more of their video signals to broadband feeds and repurpose their spectrum for datacasting.
Should that occur, commercial broadcasters like Skydance would be able to lease their radio spectrum for other purposes, including terrestrial broadband applications — using frequencies reserved for TV broadcasting for wireless Internet instead. Musk’s investment could be a first step in gaining leverage over Skydance that could see him use CBS-held broadcast spectrum for Starlink or another application in the coming years. SpaceX has also discussed plans to launch their own wireless phone network as a companion to Starlink’s satellite broadband service, and CBS spectrum could also be used for that purpose down the road.
For the time being, Musk’s $1 billion investment provides Skydance a significant amount of capital that the company needs to reorganize its business around digital entertainment as it seeks to capitalize on its newly-acquired WBD properties, including cable networks like CNN.
Larry Ellison, the Oracle co-founder and father of Skydance co-CEO David Ellison, previously invested $1 billion in Musk’s $44 billion acquisition of Twitter (now called X.com) in 2022. The elder Ellison also invested in electric vehicle manufacturer Tesla in 2018 and previously served on its Board of Directors.
