EA's $55B Record Buyout: Fans & Devs Worry About Private Equity & Saudi Ties
Electronic Arts (EA), a global gaming giant, is set to be taken private in a record-breaking $55 billion leveraged buyout. The deal, led by Saudi Arabia's Public Investment Fund (PIF) and Jared Kushner's Affinity Partners, has sparked concern among fans and developers due to private equity's controversial track record and Saudi Arabia's human rights issues.
The buyout, if approved, will be the largest in history. It involves using borrowed money and private equity to purchase EA, with the company's assets serving as collateral. Private equity firms have faced criticism for practices that can lead to company bankruptcies, including hollowed-out workforces, price increases, asset liquidation, and excessive fees. These firms often prioritize short-term profits over quality, creative output, and worker security, leading to risk-averse release strategies, predatory monetization schemes, and layoffs.
Adding to the concern, Saudi Arabia's crown prince, Mohammed bin Salman, serves as PIF's chairman. He has been accused of human rights violations, including the assassination of journalist Jamal Khashoggi. The PIF has been criticized for attempting to launder Saudi Arabia's human rights violations through international investments.
The EA buyout, led by Kushner's Affinity Partners, Silver Lake, and the PIF, has raised alarm bells among the gaming community. Fans and developers dread the potential impacts of private equity's track record and Saudi Arabia's human rights record on EA's future. The deal, if approved, will significantly reshape the gaming industry's landscape.
