The Saudi-led acquisition of Electronic Arts is meeting with more friction in the US House of Congress. 46 lawmakers have signed a letter calling on the Federal Trade Commission to investigate the debt-financed $55 billion deal for signs that it could be damaging for workers and anti-competitive to the point of breaking US anti-trust law.
As passed along by Game Developer, the letter has been organised by Labor Caucus co-chairs Steven Horsford, Debbie Dingell, Mark Pocan, and Donald Norcross – the Labor Caucus being a group of over 120 members of Congress focused on “advancing the needs of working people and the labor movement” in the USA.
Sent 22 January, the letter suggests that the acquisition could lead to cost-cutting measures such as layoffs, the offshoring of development, and studio closures. Which doesn’t feel like a massive reach, to me: if the deal goes through, the newly private and majority Saudi-owned EA will owe the banks $20 billion. They definitely aren’t going to balance the books by delegating all their PowerPoint presentations to ChatGPT.
“We are committed to preserving fair, competitive labor markets and safeguarding American jobs, and given the impact of this acquisition on workers, labor market concentration, and the long-term competitiveness of the U.S. video game industry, we urge you to thoroughly review this transaction,” the lawmakers – all of them Democrats – write.
“Workers in the video game industry are already navigating an environment marked by instability, shrinking opportunities, and repeated rounds of layoffs,” the letter continues. “EA is one of the largest employers of video game workers in the United States, and evidence suggests the company already wields significant wage-setting power.”
The lawmakers note that EA has experienced “a steep decline in median worker pay year-over-year” and has “eliminated more than 1,700 U.S. jobs since 2023”, which they consider indicative of “a labor market where workers already have fewer alternatives and employers can impose deteriorating conditions without consequence.” They consider the aforesaid $20 billion debt package a strong incentive “for the acquiring firms to pursue further cost-cutting measures, including layoffs, offshoring, restructuring, or studio closure.”
The Labor Caucus co-chairs further argue that the acquisition could be both terrible for workers and anti-competitive, in that the proposed buyers – that’s Saudi Arabia’s Public Investment Fund, private equity firm Silver Lake, and Jared Kushner’s Saudi-backed Affinity Partners – “hold extensive ownership stakes across sports leagues, sports-betting platforms, talent management, and game-development tools”.
“For example, Silver Lake’s ties to WME and TKO, along with PIF’s ownership of LIV Golf, would put EA under the same umbrella as major sports and entertainment brands that its games rely on for key licenses,” the lawmakers write. They’re concerned that if the deal goes through – and given that Kushner is married to the President’s daughter, it’s unlikely to have much trouble – the purchasing consortium and EA would control enough of the sports sector to “restrict worker mobility and reduce bargaining power for employees throughout the industry”. They also think it could violate anti-trust laws.
Unveiled in September last year, the EA deal has already attracted strong criticism from American unions and senators. The unions argue, amongst other things, that EA is “not a struggling company” right now, making hundreds of millions in profit. As such, they think plunging the company into debt is an exercise in padding investor pockets at the expense of worker livelihoods. Can’t really disagree!
Senators Richard Blumenthal and Elizabeth Warren, meanwhile, are worried that selling EA to Saudi Arabia is a national security risk, commenting that the country might use EA consumer data for surveillance and propaganda. As ever, I can see the logic of this, but it’s worth noting that EA among other North American companies routinely publish games that are very flattering to the US military, and that US companies have participated in government surveillance operations.
A broader concern is that Saudi Arabia are buying up overseas brands, including a number of eSports organisations, to distract attention from their terrible human rights record. There’s also anxiety that the country’s authoritarian rulers might impose their values on EA games like The Sims that embrace diversity. One former BioWare executive has suggested that the Dragon Age studio are particularly at risk of either co-option or closure.
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