Paramount Seeks $7.5 Billion in Debt to Fund Warner Bros. Merger

Debt Financing for Merger

Paramount Skydance, led by David Ellison, has announced that it is launching a syndication to raise $7.5 billion through a proposed senior secured incremental tranche of term "B" loans. The company intends to use these funds toward its $111 billion merger with Warner Bros. Discovery and to pay down certain other debt.

"Paramount intends to utilize the net proceeds of these borrowings, together with cash on hand and the net proceeds of the previously announced equity financing, to finance the purchase price for its previously announced acquisition of Warner Bros. Discovery, Inc. and the repayment of certain existing debt," Paramount said in a statement.

This brings the total amount of additional secured debt Paramount now intends to raise to approximately $44.4 billion, in addition to previously announced financings, subject to market conditions and other factors.

Merger Progress and Legal Settlement

The deal to merge with Warner Bros. Discovery is nearing completion after the company reached a settlement with 12 state attorneys general to resolve their antitrust lawsuit over the merger. The judge in the case has scheduled a hearing for Thursday to review points of the proposed consent decree. If approved, the merger is expected to close within approximately two weeks.

In an effort to derail the transaction, the Block the Merger coalition filed an emergency request asking U.S. District Court Judge Martínez-Olguín to allow interested parties to formally oppose what they described as a "weak and unenforceable" consent decree.

Financial Backing from Foreign Entities

Oracle founder and billionaire Larry Ellison, who is David's father, has personally guaranteed $46.7 billion in equity financing for the WBD takeover. In addition, Paramount has secured $24 billion in commitments from sovereign wealth funds of Saudi Arabia, Qatar, and the United Arab Emirates. According to Paramount, these three Middle Eastern funds would own 38.5% of the combined Paramount-Warner Bros.

Pro-Forma Debt Estimate

At the end of 2026, on a pro-forma basis, the merged Paramount-Warner Bros. would have net debt of $77.2 billion, according to Morgan Stanley analysts. With the additional loans Paramount is seeking, this estimate will likely be revised upward.

Strategic Implications

This significant financing move underscores Paramount's commitment to completing its merger with Warner Bros. Discovery. The deal represents one of the largest entertainment consolidations in recent years, aiming to create a powerful streaming and content powerhouse. By securing substantial debt financing, Paramount is positioning itself for growth while navigating regulatory scrutiny.

The company's approach reflects a strategic shift toward leveraging both debt and equity financing to achieve its long-term goals. This financial strategy demonstrates confidence in the merged entity's future performance and market position, even as it faces ongoing challenges related to competition and content licensing.

Market Reaction and Industry Context

The announcement comes amid broader industry trends toward consolidation and strategic partnerships. As streaming services continue to reshape traditional media landscapes, companies like Paramount are investing heavily in their financial infrastructure to support future expansion.

This financing round also highlights the continued importance of international investment in American entertainment. The involvement of Middle Eastern sovereign wealth funds signals global confidence in the U.S. entertainment sector's growth potential.