Larry Ellison Risk Widens as Paramount And Oracle Take on More Debt

As Paramount Skydance Corp. and Oracle Corp. vault into the ranks of corporate America's biggest borrowers, their links to the same man — billionaire Larry Ellison — are starting to stir concern on Wall Street, Davide Barbuscia reported for Bloomberg.

Billionaire Larry Ellison Faces Increased Investor Scrutiny As Paramount And Oracle Take On More Debt. [Photo: Tony Webster Flickr]

The assumption among many investors has been that Ellison would step in to support Paramount if it ran into financial trouble after taking on $52 billion of additional debt to help finance its acquisition of Warner Bros. Discovery Inc.

But with much of the Ellison family's wealth tied to Oracle shares as the company undertakes its own capital-intensive AI buildout, investors are concerned that the value of that safety net could come under pressure just when Paramount needs it most.

Those concerns are already being reflected in the market, according to money managers.

The cost of insuring the debt of both companies against default has converged and is increasingly moving in lockstep, suggesting that investors are beginning to treat the two credits as intertwined.

It's another factor lenders need to consider when assessing the mounting debt and execution risks facing the companies, according to Campe Goodman, a portfolio manager at Wellington Management Co.

"You have to consider your total Larry Ellison risk," Goodman said, adding that investors should regard Oracle and Paramount as related bets rather than completely separate credits.

"You probably want to consider your exposure to both."