🔊 Inside The $55 Billion Sports Gaming Acquisition

In the largest leveraged buyout in history, Saudi Arabia’s Public Investment Fund (PIF), alongside Silver Lake and Affinity Partners, is taking EA Sports, one of the most prominent video game publishers, private in a $55 billion deal.

The PIF will invest $36 billion into the acquisition, building on its previous 10% stake in the company. EA’s shareholders will receive $210 per share upon completion of the deal.

EA Sports is the studio behind some of the most iconic sports franchises on the planet, including:

This transaction signals a massive financial milestone but is also part of a strategy that’s much bigger.

Let’s get into it…

Why Does This Matter?

For years, the global sports industry has been anchored in the US, the epicenter of the most mature leagues, sophisticated ownership groups, and commercialized media platforms.

But recently, Saudi Arabia has been making their case heard.

This isn’t random or happenstance by any means.

In 2016, the country launched Saudi Vision 2030, a strategic national plan by Crown Prince Mohammed bin Salman to transform Saudi Arabia's economy by reducing its dependence on oil, modernizing its society, and fostering growth in non-oil sectors such as tourism, technology, and entertainment.

So far, this strategy has manifested in billions of dollars deployed across sports, media, and gaming.

From Savvy Games Group, the country’s video game investment, development, and publishing arm, $4.9 billion acquisition of Scopely (Monopoly GO!) and $3.5 billion stake in Niantic (Pokémon GO!), to the purchase and merger of ESL and FACEIT into the world’s largest esports operator.

Beyond gaming, the PIF’s sports portfolio and interests include:

In parallel, they’ve also launched SRJ Sports Investments, a firm focused on acquiring sports IP, commercial rights, and event properties.

With all of this on the table, the acquisition of EA Sports seems like a logical next step.

Sports gaming is more than just leisure.

It’s where the next generation of fans is created, and communities are formed.

With this deal, it's not about Saudi Arabia having a seat at the table anymore.

It's about them having control and cultural dominance.

By having this, they can steer the direction of industries and shift entire ecosystems.

Saudi Arabia is putting the entire world on notice, establishing footholds in everything, including streaming, esports, media rights, emerging leagues, and more.

This EA Sports move positions them for global influence through IP and further ownership of the entire sports infrastructure.

A nation once defined by oil is now becoming the capital of sports fandom.

Saudi Arabia doesn’t just want to participate in the industry.

It wants to define it.

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• Ankored Raises $4M. Ankored, a youth sports safety and compliance platform provider, recently raised $4 million in Seed funding led by Rally Ventures. The company intends to use the funds to expand product development and partnerships, aiming to become the standard compliance platform for youth sports organizations nationwide. Founded by CEO Seth Lieberman, Ankored enables compliance, education, and training by centralizing all requirements into one intuitive workflow (more here).

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• Crux Football Acquires Montpellier HSC. Montpellier HSC, a Ligue 2 French women's football club, has been acquired by Crux Football, a multi-club platform focused on scaling women's football, led by former New Zealand women's soccer team captain Bex Smith. Montpellier, twice winners of France’s top division, will see Crux take control of its women’s teams, academies, football operations, and commercial development. This is Crux Football’s first team acquisition, though they reportedly plan to acquire at least five teams out of their targeted $50 million fund. Financial terms of the deal were not disclosed (more here).

• NBA & AWS Announce AI Partnership. The NBA and Amazon Web Services (AWS) announced a multi-year partnership to power the league’s next generation of innovation. AWS will become the Official Cloud and Cloud AI Partner of the NBA and its affiliate leagues, including the WNBA, NBA G League, Basketball Africa League, and NBA Take-Two Media. As part of the partnership, the NBA and AWS will also launch NBA Inside the Game powered by AWS, a basketball intelligence platform that turns billions of data points into compelling insights and interactive experiences (more here).

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• Prep Network & Maple Park Capital Announce Partnership. Prep Network, a leading prep sports platform focused on subscription content, live events, and collegiate athlete recruitment, announced a strategic partnership with Maple Park Capital Partners, a private investment firm specializing in service businesses within the experiential economy, to support its continued platform expansion and product innovation. This partnership will help Prep Network expand its slate of events into new regions, deepen its subscription content offerings, and accelerate product innovation to enhance the experience for athletes, families, and coaches (more here).

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• Chris Paul Joins Angel City FC Ownership Group. LA Clippers point guard Chris Paul is one of four new minority investors in the NWSL's Angel City FC, the team announced this week. The 12-time NBA All-Star and two-time Olympic gold medalist joins an investment group that includes more than 100 people. Billionaire Solina Chau, who Forbes recently said has a net worth of roughly $3 billion, also joined Angel City as an investor, as well as consultant Ina Coleman and entrepreneur Paul Bernon (more here).

• Sixth Street’s Josh Empson On Why Sports Is A Compelling Asset Class For Investors. Josh Empson, partner at Sixth Street, says that Asia has to be a focus for anyone investing in sports and entertainment, and suggests investors should take a holistic approach: take a stake in the entire ecosystem, not just the sports teams themselves. He joins CNBC and points out that sports have managed to keep up in a changing world where distribution of entertainment has become streaming-led (more here).

This week’s guest on the Vetted Sports podcast is Jason Burchard.

Jason Burchard is Co-founder and CEO of RootNote.

RootNote is a software platform empowering athletes, creators, and the next generation of entertainment brands with data.

In this episode, we discuss:
‣ How RootNote helps athletes and creators build brands
‣ Advice for athletes looking to build their personal brand
‣ The future of the creator economy

Check out the full episode here: Apple | Spotify | YouTube