Dem
47
GOP
53
This item is a little different than the other three, but it still fits the theme, we'd say. The preeminent maker of sports-themed video games is Electronic Arts. The company does make other games, but it's the sports games that EA is particularly known for.
Yesterday, it was announced that EA, which is currently publicly traded, will be taken private, with ownership to pass to an investor group headlined by the Saudi Arabian sovereign wealth fund, and that also includes participation by first son-in-law Jared Kushner's firm. The price tag is $55 billion, with the investors taking on $20 billion in debt in order to make the purchase. This is far and away the largest private-equity-funded buyout ever, dwarfing the $32 billion paid to take Texas utility TXU private in 2007.
Will this have a negative impact on sports, or at least sports gaming? Probably so. It's hard to know what the Saudis are trying to accomplish here; is this more sportswashing, or are they telling the truth, that this is about diversifying the royal family's holdings? Whatever the case may be, these kinds of leveraged buyouts rarely lead to a better product. Either the buyer dismembers the company and sells the parts (Mitt Romney style), or else they get conservative in their management, so as to try to keep the balance sheet under control. Conservative is not a great dynamic for the world of gaming, where innovation is essential to keep people buying (especially sports games, where a new version for each sport comes out every year; e.g., Madden NFL 24, Madden NFL 25, Madden NFL 26, etc.).
The real concern here, however, is not sporting in nature. Because this transaction involves a foreign entity buying an American company, it is subject to regulatory approval from the Committee on Foreign Investment. Undoubtedly, with the president's son-in-law involved, that review process will be oh so rigorous. But beyond the very likely corruption angle, these kinds of leveraged buyouts basically disappeared in 2007-08, as they were pretty deeply entwined with the subprime mortgage crisis. If and when this deal goes through, it will be a pretty clear signal that this type of transaction is back, and that the Trump administration is open for leveraged business. It could therefore be the start of another cycle of recklessness that brings down the U.S. economy. Assuming, you know, that the insane tariffs, and the mucking around with the Fed, and the magic-math BBB, and six other administration policies don't do the job first. (Z)