How The Children Of Billionaires Took Over America

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Ed Elson (1:20)

Welcome to Simply Put. I'm Ed Elson.

This week, Inheritocracy.

After 13 months of bidding wars and lawsuits, Paramount has finally closed its $111 billion acquisition of Warner Brothers Discovery. The merger makes CEO David Ellison by far the most powerful media player in the world, as he now controls, among other things, CBS News, CNN, HBO, HBO Max, TNT, TBS, MTV, Comedy Central, Nickelodeon, The Food Network, Paramount Plus, the Star Trek franchise, the Mission Impossible franchise, the DC universe, and the Harry Potter universe. Think of any iconic media asset. David Ellison probably owns it now.

So who is David Ellison? Good question. Up until recently, he was relatively unknown. His production company, Skydance, had produced a couple of successful films, but nothing groundbreaking. Originally, he wanted to be an actor. After dropping out of USC in 2005, David starred in Flyboys, his first feature film, which grossed less than $20 million on a production budget of $60 million.

The movie was a failure and David struggled to break through. Then in 2024, David approached Shari Redstone, the chairwoman of Paramount Global, with an $8 billion pile of cash. It was at that moment that he started to turn heads. Who is this guy? People wondered. And where did he get all of that money? One quick Google search and things were clarified. He's Larry Ellison's son.

The older Ellison is the founder of Oracle and the eighth richest man on the planet. He also provided his son with more than $50 billion to pursue his dreams, financing everything from Flyboys to his acquisition of Warner Brothers Discovery. While it's possible that David has a knack for media, I doubt that anyone really cares. The true source of his power is who his dad is.

We all know someone like David, the guy whose parents got them the job. But few parents have ever been rich enough to give their kid an entire industry, which is why this acquisition is so important. David Ellison's empire isn't just a media story, but a signal of our nation's future. Gone are the days when billionaires controlled America. Soon, it will be ruled by their children. Welcome to the Inheritocracy, a world where wealthy children don't receive PlayStations for Christmas, but power. David Ellison is perhaps the most extreme example. As CEO of Skydance, the Boy King can now upend the entire American media ecosystem at his will. But he isn't alone. From Fox Corporation to Canta Fitzgerald, many of America's most powerful companies are no longer run by entrepreneurs, but by their children.

The Inheritocracy is most rife in the media industry, where dual-class shareholder structures have helped to maintain ownership within families. Comcast, Fox, The New York Times, and now Warner Brothers Discovery are all run by people whose parents put them there. Paramount had also been controlled by a billionaire's daughter, Sherry, until a richer billionaire's son, David, bought her out. Has America always been this way?

No. Due to the extraordinary explosion in wealth inequality, the children of billionaires now sit on $4.7 trillion, more than the entire UK stock market. In 2023, for the first time ever, heirs took in more wealth than founders did. About a third of billionaires now become billionaires, not because they built something, but because of inheritance. Being born rich has never paid as well as it does today. The inheritocracy might be new in America, but not in the rest of the world. England, for example, used to be ruled by kings, queens, lords and ladies, all of whom obtained power via inheritance. It wasn't until this year that the UK's hereditary system of peerage was abolished, as the nation finally realized after 700 years that awarding leadership based on who your parents are is both unfair and stupid. Indeed, one of the main reasons America was founded was to not have an inheritocracy. Soon after establishing independence, the founding fathers took great pains to prevent it. Thomas Jefferson, for example, led Virginia to abolish both entail and primogeniture, two laws that preserved large estates and handed them to their eldest sons. Later, Congress established the estate tax, which was designed to redistribute inherited wealth. By the 1940s, the top tax rate on the largest fortunes was nearly 80%.