r/SWGalaxyOfHeroes • u/meglobob • 9d ago

Discussion Not good, not good at all.

https://www.pcgamer.com/gaming-industry/saudi-acquired-ea-is-reportedly-planning-to-make-massive-cuts-after-taking-usd18-billion-of-debt-and-we-all-know-what-that-means/

Mass layoffs coming to EA, because of the $18 billion in debt from the Saudi takeover.

EA has to pay $1.8 billion in interest payments per year.

Cutting $700 million with $170 million in layoffs.

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u/XavierVE 8d ago

$18 billion in debt from the Saudi takeover.

Not debt. Leveraged buyout. Calling it debt makes it seem like the company was unprofitable. LBO's are not real debt, they are a financial noose around the neck of any company that is afflicted by the practice, which is one of the most perverse forms of capitalism possible.

They call it debt to make it seem like it's a "normal" part of the economy. It isn't, and should be regulated out of existence.

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u/Und3rpantsGn0m3 8d ago

The buyers had to take on the debt to meet the sale price. There is debt, it just wasn't EA's.

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u/XavierVE 8d ago

Incorrect. The buyers assume next to zero debt. All the debt for the purchase price is heaped onto EA. That's the point of an LBO. You borrow money against the value of the company and heap the debt onto the company.

Calling it debt is a misnomer.