r/masseffect • u/deanpmorrison • 8h ago

NEWS EA's Garbage Statement on the Closure

https://www.ea.com/news/building-eas-next-chapter

TL;DR

They're laying people off and canceling projects, and they're up their own ass about it

505 Upvotes

93% Upvoted

193 comments sorted by

View all comments

•

u/Chorik 8h ago

20 BILLION debt says it all. It was almost inevitable. Unfortunately way more layoffs coming before the year ends. 

It will prob end up like Toy'R'Us levered buyout, Saudi fund will parcel out the skeleton of the company in few years

•

u/KnG_Yemma 8h ago

20 billion in debt sounds so grossly irresponsible for a company as big as EA, how the hell does that even happen?

•

u/Nemesis_Ghost 7h ago

Easy, you take out a massive loan to buy a company easily worth 2-3x that, then make your new company owe that debt.

•

u/TheMadTemplar 7h ago

It was a leveraged buyout. Why they did it I have no clue, because it doesn't help EA at all, but it happens in big business. Basically, the company being purchased agrees as part of the acquisition to take on the responsibility of the debt from some of the loans required to purchase them. They will then need to both pay-off those loans to get out from under the debt and make money for their new owners. Best guess is that the prior owners got a massive payout from the acquisition, then dip out leaving the company with billions in new debt.

•

u/delecti 1h ago

Why they did it I have no clue, because it doesn't help EA at all

The former shareholders all got to sell for a profit. "EA" was property, you don't consider how your car would feel if someone offered to buy it for a premium.

And like, it sucks, because EA also owned a lot of culturally important franchises, but none of that matters to the shareholders.

•

u/Maximum__Mango 8h ago

I guess everybody already forgot about the Saudi's $55 billion leveraged buyout of EA with the help of Jared Kushner?

•

u/TheRealJikker 7h ago

I think a lot of folks don't realize how much of that buyout was transferred in debt onto EA.

•

u/TheWandererKing 8h ago

PEPPERIDGE FARM REMEMBERS. AND THINKS JARED IS A TRAITOROUS SNAKE

•

u/blue_line-1987 5h ago

Well, that's a requirement for a position in that regime.

•

u/pardyball 7h ago

Skydance's debt is even crazier