The Saudi-Led Acquisition of Electronic Arts Sparks Congressional Concerns

A recent acquisition deal led by Saudi investors to acquire Electronic Arts has stirred up a wave of opposition within the US House of Congress. A group of 46 lawmakers have joined forces to urge the Federal Trade Commission to investigate the $55 billion debt-financed deal. Concerns have been raised regarding its potential negative impact on workers and its possible violation of US anti-trust laws.

According to a report from Game Developer, the letter addressing these concerns was spearheaded by Labor Caucus co-chairs including Steven Horsford, Debbie Dingell, Mark Pocan, and Donald Norcross. The Labor Caucus, consisting of over 120 Congress members, focuses on advocating for the needs of working people and the labor movement in the United States.

Sent on January 22nd, the letter highlights fears that the acquisition could result in cost-cutting measures such as layoffs, offshoring of development, and studio closures. The deal, if finalized, would leave the newly private and predominantly Saudi-owned EA with a substantial debt of $20 billion, prompting concerns about its impact on the workforce.

The lawmakers, all from the Democratic party, emphasized their commitment to maintaining fair and competitive labor markets, safeguarding American jobs, and ensuring the long-term competitiveness of the US video game industry. They stress the need for a thorough review of the transaction to assess its implications.

Furthermore, the lawmakers express concerns about the existing challenges faced by workers in the video game industry, including instability, limited opportunities, and frequent layoffs. They point out that EA, as one of the largest employers in the industry, already holds significant influence over wage-setting.

The letter also notes that EA has experienced a decline in median worker pay and has cut over 1,700 US jobs since 2023, indicating a concerning trend of deteriorating conditions for workers. The lawmakers warn that the substantial debt from the acquisition could incentivize further cost-cutting measures, potentially leading to more layoffs and studio closures.

The Labor Caucus co-chairs argue that the acquisition could not only harm workers but also raise anti-competitive concerns. The proposed buyers, including Saudi Arabia’s Public Investment Fund, private equity firm Silver Lake, and Jared Kushner’s Saudi-backed Affinity Partners, have extensive ownership stakes in various sectors, potentially leading to market concentration.

One of the key concerns raised is the potential consolidation of ownership across sports leagues, sports-betting platforms, talent management, and game-development tools, which could limit worker mobility and bargaining power. The lawmakers fear that this consolidation could also violate anti-trust laws.

The EA acquisition, unveiled in September, has faced criticism from American unions and senators who argue that the move could prioritize investor profits over worker livelihoods. Additionally, concerns have been raised about the national security implications of selling EA to Saudi investors, with worries about potential surveillance and propaganda use of consumer data.

There is a broader concern about Saudi Arabia’s growing presence in overseas brands, including eSports organizations, which some view as an attempt to divert attention from human rights issues. There are also fears that the country’s authoritarian regime could influence the content of EA games, particularly those promoting diversity.

Overall, the acquisition of Electronic Arts by Saudi investors has sparked a heated debate in Congress, with lawmakers and industry experts raising valid concerns about its potential impact on workers, competition in the industry, and broader societal implications.