Paramount Plans to Use ‘Foreign Investors’ to Help Finance WBD Deal

We nonetheless do not know if Paramount intends to use billions of dollars from Gulf states like Saudi Arabia to help it buy Warner Bros. Discovery.

But when Paramount does find yourself doing that, it would not be a nasty factor, says a key Paramount backer.

That replace comes through Gerry Cardinale, who heads up RedBird Capital Companions, the personal fairness firm that helped finance Larry and David Ellison’s acquisition of Paramount final yr and is doing the identical with their WBD deal now.

In a podcast with Puck’s Matt Belloni revealed Wednesday night time, Cardinale would not remark instantly on Paramount’s previously disclosed plans to use $24 billion from sovereign wealth funds controlled by Saudi Arabia, Abu Dhabi, and Qatar to help buy WBD.

As a substitute, he reiterated Paramount’s present messaging on the deal’s financing: The $47 billion in fairness Paramount will use to purchase WBD shall be “backstopped” by the Ellison household and RedBird — which means they’re finally on the hook to pay up. The remainder of the $81 billion deal shall be financed with debt.

Cardinale additionally acknowledged what Paramount has disclosed in its present disclosure documents: It intends to promote parts of that $47 billion dedication to different traders: “We’ve not syndicated something presently,” he mentioned. “We do count on to syndicate with strategic, home, and international traders. However on the finish of the day, that alchemy should not matter as a result of it will be finished in the fitting means.”

And when requested about issues about Center Japanese nations proudly owning a part of a media conglomerate that features property like CNN, Cardinale recommended that could possibly be a plus.

“I believe we need to be a world firm,” he mentioned. “You have a look at what is going on on proper now geopolitically. What is going on on proper now geopolitically out of the Center East would not be, the positives of that might not be occurring with out a few of these sovereigns that you just’re referring to.”

He continued:

“The world is altering. We are able to stick our head within the sand and fake it isn’t, or we are able to embrace globalization and the spinoff advantages each geopolitically and in any other case that come from that. Content material technology popping out of Hollywood is certainly one of America’s biggest exports.

I firmly embrace the worldwide nature and orientation that we convey to this from a capital standpoint, from a footprint standpoint, and so on. On the finish of the day, I do perceive a number of the issues that you’ve got raised, however that may work itself out between signing and shutting as a result of on the finish of the day, worst-case situation, Ellison and RedBird are 100% of this factor.”

All of which suggests to me that Paramount nonetheless intends to make use of cash from Gulf-based sovereign wealth funds to purchase WBD.

What I do not perceive is why the corporate will not say that out loud. Does that imply it is nonetheless negotiating with potential traders? Or that it is reticent to reveal exterior traders, for no matter cause, till it has to? A Paramount rep declined to remark.