Of course, just because someone is working on a deal for a company, and it leaks to The Wall Street Journal, doesn’t mean a term sheet is coming all that soon. Putting together an unsolicited bid takes time, which is probably why it’s late Wednesday and David Ellison has yet to bid on Warner Bros. Discovery. After all, this deal would be plenty complicated no matter how you slice it. First, it’s only been a month since the Ellisons and RedBird Capital took control of Paramount Skydance. Yes, they’ve had more than a year to contemplate what they would do with these assets, but that’s quite different from actually having the reins, making things happen, and implementing a new strategy. Meanwhile, two months have passed since the rumors started percolating that Paramount Skydance was going to acquire Bari Weiss’s The Free Press for around $150 million, and that deal has yet to be finalized and announced. Even at Sun Valley, few things happen overnight.

At the moment, WBD has an equity market value of nearly $45 billion, thanks to a 42 percent increase in the company’s stock price during the past five trading sessions, following the Journal report that the Ellisons were preparing their unsolicited bid for the company. WBD also has around $30 billion of net debt, giving the company a total enterprise value of $75 billion. (You will recall that in April 2022, Discovery Communications paid around $100 billion for WarnerMedia alone. But we’ll leave that difficult fact for another day.) Paramount Skydance, for its part, has an equity value of almost $20 billion, up 18 percent since the news leaked. The company’s enterprise value is around $30 billion, including about $10 billion of net debt.

Normally, a $30 billion company would not be able to swallow a $75 billion company without doing the kind of Reverse Morris Trust transaction that Discovery deployed to buy WarnerMedia. (The deal essentially gave David Zaslav control while preserving AT&T shareholders as majority owners.) But it’s pretty much impossible to execute a Reverse Morris in an all-cash deal, as Ellison is reportedly contemplating. I’m not sure if the Ellisons are planning to pay more per share than the roughly $18 that WBD already trades for, following the massive increase in the past few days. They certainly don’t have to. But to seal the deal, they might want to give Zaz the satisfaction of thinking he got them to pay a bit more. (Every $1 per share increase in the WBD stock is about $2.5 billion.) If the Ellisons were to end up paying, say, $22 a share, as Rich Greenfield at LightShed Partners predicted, that would equate to roughly $55 billion in cash required to buy the equity, while assuming the $30 billion of WBD’s debt. Under normal circumstances, this deal might be considered dead on arrival.

But, of course, the reason we are even taking this seriously is because David’s father is Larry Ellison, with a current net worth of $365 billion (up $173 billion alone in 2025) and an apparent desire to bankroll his son’s Hollywood aspirations. I have no inside knowledge of the liquidity of Larry’s wealth, but I assume he can come up with the fresh $55 billion to buy WBD, either by selling his Oracle stock or some of his real estate assets in Hawaii and Florida; or by exercising the revolver on a line of credit from the likes of Apollo, Blackstone, Ares, or KKR; or through a margin loan from a consortium of big Wall Street banks. He’ll get the money if he wants to do this deal. Whether there would be a negative impact on Oracle’s stock remains to be seen. But I kind of doubt it, since Larry still owns some 40 percent of the company.

With Drexel’s “Highly Confident” letters a relic of the past—and discredited, in any event—it will probably take even Larry Ellison some time to get the financial backing together. And yet, stock market investors are not waiting for the proof of the Ellisons’ interest in WBD; they are driving up the WBD stock first, and asking questions later.