Senators Richard Blumenthal and Elizabeth Warren have called on the Treasury Department to hit the brakes on Saudi Arabia’s private-equity-backed buyout of Electronic Arts over national security concerns, including the deal giving a foreign country unfettered access to “sensitive consumer data.” They’ve demanded an investigation into the risks associated with the unprecedented agreement which is expected to earn a $500 million windfall for the banking partners involved in the fees alone.
“We urge you and the Committee to apply searching scrutiny to this unprecedented, proposed foreign privatization of a major American technology and entertainment company and request that you provide the Permanent Subcommittee on Investigations and Senate Committee on Banking, Housing, and Urban Affairs information on how CFIUS (Committee on Foreign Investment in the United States) plans to ensure that the national security risks arising from the proposed acquisition may be mitigated,” the Democratic senators wrote in a letter to Treasury Secretary Scott Bessent this week.
It goes on to outline some of their concerns:
The PIF’s control over EA’s operations could extend to influencing or directing the company’s design, features, and product decisions to advance the Saudi government’s specific and long-term objectives. PIF would be well positioned to dictate or veto what stories are told to Americans through the popular medium of video games, controlling narratives about U.S. history and culture. In short, the Saudi government’s ability to exert its influence through EA would offer the authoritarian regime an effective tool to project power worldwide. As one analyst observed, “Saudi Arabia clearly recognizes the political and cultural influence of video games, especially among young people.”
In addition to asking for guarantees from the Trump Administration that it’s investigated national security risks associated with the deal and how to mitigate them, the letter also calls for information about any communications the Treasury Department had with Jared Kushner ahead of the buyout’s announcement. Trump’s son-in-law is one of the members of the “consortium” that’s acquiring EA and prior reporting claimed his connections to the president would be instrumental in helping it avoid regulatory scrutiny.
“EA is not a struggling company”
United Videogame Workers-CWA, a direct-join, industry-wide video game union with the Communications Workers of America, has also called for regulators to investigate the threat of mass layoffs associated with the acquisition. “If jobs are lost or studios are closed due to this deal, that would be a choice, not a necessity, made to pad investors’ pockets—not to strengthen the company,” the group wrote in a statement on Thursday.
It continued, “We are calling on regulators and elected officials to scrutinize this deal and ensure that any path forward protects jobs, preserves creative freedom, and keeps decision-making accountable to the workers who make EA successful.” The group is now circulating a petition for fans and developers to write to the Federal Trade Commission in support of investigating the terms of the deal more closely.
While the CWA has made major in-roads with unionizing game workers at Microsoft-owned studios thanks to a soon-to-sunset labor neutrality agreement, that organizing effort hasn’t yet resulted in unionized shops at places like EA. The leveraged buyout, set to complete sometime in mid-2027, could be the catalyst for teams at Respawn Entertainment or other EA-owned studios to seek union membership.
A $500 million windfall for Wall Street
While the exact terms of the buyout are still unknown, Bloomberg reports that the banking partners involved are set to make a small fortune just from the fees associated with it. Roughly $20 billion of the $55 billion acquisition will be debt-financed, with JP Morgan organizing the loan. Bloomberg calls it the “biggest debt commitment ever by a single lender for an LBO [leveraged buyout].”
That’s a lot of risk for EA, which would need to begin servicing high interest rates on the debt as part of the deal, and it’s led to fears that a new round of mass budget cuts and staff layoffs will follow if the merger is approved. While some analysts have argued that going private could free the publisher to pursue longer-term creative visions, it could just as well be an anchor that makes it more cash-hungry than ever.
Banks, on the other hand, could make out either way. Anyone helping JP Morgan underwrite the debt will be in line for a piece of the roughly $500 million in banking fees that Bloomberg estimates the deal will bring in. EA’s c-suite will also be in position for a premium payout on all of their stock awards over the years. Most of EA’s employees, on the other hand, will be rewarded with fresh fears of layoffs.
