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Jason Schreier

@jasonschreier.bsky.social

140K followers 750 following 1K posts

Reporter at Bloomberg | co-host of Triple Click | New York Times bestselling author of Play Nice + Press Reset + Blood, Sweat, and Pixels | [email protected]

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Jason Schreier @jasonschreier.bsky.social · Oct 11

Did you know that I wrote a book chronicling the wild story of Blizzard Entertainment and it comes out in… wait a minute it’s already out! And you can get it right now! Holy shit www.hachettebookgroup.com/titles/jason...

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Jason Schreier @jasonschreier.bsky.social · 20h

thanks Graeme - that means a lot coming from you!

Jason Schreier @jasonschreier.bsky.social · 22h

Unlikely

Jason Schreier @jasonschreier.bsky.social · 22h

Give it to a friend

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Jason Schreier @jasonschreier.bsky.social · 22h

My latest book, Play Nice: The Rise, Fall, and Future of Blizzard Entertainment, is out in paperback today! You can get it wherever you get your books. Ideally at your local indie bookstore www.hachettebookgroup.com/titles/jason...

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Jason Schreier @jasonschreier.bsky.social · 4d

EA's bombshell deal to go private could be good for investors, but bad for employees. Leveraged buyouts almost always lead to immediate mass layoffs, and more than half of EA's current cash flow will likely go toward servicing the debt.

This week's column: www.bloomberg.com/news/newslet...

EA's Deal to Go Private Could Be Good for Investors, Bad for Employees

Leveraged buyouts almost always lead to cost-cutting in the form of big layoffs

www.bloomberg.com

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Reposted by Jason Schreier

MinnMax @minnmax.com · 5d

Confused by EA going private? Game industry expert @jasonschreier.bsky.social from @bloomberg.com and Triple Click joins us on the new episode of The MinnMax Show to help explain the situation. youtu.be/se-CQM_rXwM

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Jason Schreier @jasonschreier.bsky.social · 7d

My colleagues at Bloomberg report that the $20 billion debt in the EA deal is expected to be rated single-B — meaning it is considered a "junk" loan, or one that is high-risk and speculative, typically offering high interest rates. Which the new EA will have to pay
www.bloomberg.com/news/article...

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Jason Schreier @jasonschreier.bsky.social · 8d

Think about it this way: if you buy a house with a mortgage, the loan is "funded at close" — meaning the sellers get the full amount from the bank as soon as you all sign the paperwork — and you owe the debt for however many years it takes.

Jason Schreier @jasonschreier.bsky.social · 8d

No, that means the bank is paying $18 billion to the borrowers at the close of the deal, and $2 billion later. The debt is $20 billion.

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Jason Schreier @jasonschreier.bsky.social · 8d

And they're going to want 20-30% profit on top of that. In the best case scenario (they manage to stay profitable without getting buried by debt like Toys R Us did) it still means significant cost cutting

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Jason Schreier @jasonschreier.bsky.social · 8d

That's impossible to say without knowing how the debt is structured but the interest alone could be a billion a year, or more than half of EA's EBITDA

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Jason Schreier @jasonschreier.bsky.social · 9d

If there’s a market, sure. But companies don’t often sell their IP, and nobody would want to buy, say, BioWare without also getting Dragon Age and Mass Effect

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Jason Schreier @jasonschreier.bsky.social · 9d

A lot of people are (understandably) focused on the Saudi Arabia and Kushner part of this, but the far bigger immediate impact will come from the new private EA being on the hook for $20 billion in debt. That could mean mass layoffs, more aggressive monetization, and other big cost-cutting measures

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Jason Schreier @jasonschreier.bsky.social · 9d

Yes and that $20 billion will go on EA’s books. Essentially they are buying EA with EA

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Jason Schreier @jasonschreier.bsky.social · 9d

It’s official: EA is going private.

The leveraged buyout will be financed by a staggering $20 billion of debt, which likely means some *aggressive* cost cutting is ahead for EA in the coming months and years.

www.businesswire.com/news/home/20...

www.businesswire.com

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Jason Schreier @jasonschreier.bsky.social · 11d

Yeah, this is conjecture but I think $20bn in debt is likely going to have a much larger impact on EA than Saudi potentially increasing their stake will

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Jason Schreier @jasonschreier.bsky.social · 11d

Some important context I think people are missing is that Saudi Arabia *already* owns 10% of Electronic Arts. It's the company's third-largest institutional shareholder.

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Jason Schreier @jasonschreier.bsky.social · 11d

"Going private" just means delisting from the stock market and becoming a privately owned company rather than a publicly owned one. doesn't matter who the owners are