Why Saudi Arabia bought EA in world's biggest gaming deal

From a $55 billion gaming takeover to the NFL’s surprising shake-ups, here’s what’s moving money and markets in the sports world.

This week on Yahoo Finance Sports Report, host Joe Pompliano takes a look at some of this week’s biggest headlines in the sports business world that you and your portfolio need to know. From Saudi Arabia's Public Investment Fund leading a joint acquisition of Electronic Arts (EA) for $55 billion to the NBA selling their franchises in the Africa League and John Cena’s final WWE match, there’s plenty of money moves shaping the sports industry.

Yahoo Sports Senior Reporter Frank Schwab joins the show to talk about the latest coming out of the latest in the NFL, including Jaxson Dart’s first game with the New York Giants, and why the initially favored Baltimore Ravens are sitting third in their division’s standings.

Plus, NFL Vice President, Head of Flag Football Stephanie Kwok stops by the show to talk about the growth of the sport and teases what’s to come for the league ahead of the 2028 Olympics.

Video Transcript

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Welcome to Yahoo Finance Sports Report, a unique look at the business of sports brought to you by Yahoo Finance and Yahoo Sports. I'm your host, Joe Pagliano, and I'm here to coach you through a financial game. Let's huddle up and get right into it.We are kicking off this week with Pop's playbook, where I take a look at some of the biggest headlines in sports that you and your portfolio need to know. First up in today's playbook, let's talk about the MLB playoffs. Ticket prices across sports have gone up. That's no secret, and the MLB playoffs are no exception. The cheapest ticket for wild card games in New York, Chicago, and Los Angeles are currently selling for more than $300 while Cleveland's prices are still near $100 too.But teams aren't the only ones benefiting from higher prices. Approximately 15% of MLB's playoff ticket revenue is allocated to the commissioner's office. Players then receive 35% via a bonus structure, and the home and away teams split the remaining 50%. Next up on today's playbook is news that Saudi Arabia just pulled off the largest.Leveraged buyout in history. Saudi Arabia's $925 billion sovereign wealth fund is acquiring electronic arts in a $55 billion deal, valuing the video game giant at $210 per share. That's a 25% premium to EA's current stock price, and it means EA will now leave the public market to go private.Now EA creates video games like FIFA, Madden F1 titles that dominate the global sports gaming market. But this deal isn't necessarily about video games. For Saudi Arabia's Crown Prince Mohammed bin Salam, it's about influence. By controlling EA, Saudi Arabia gains unprecedented leverage over how billions of fans interact with sports digitally, extending the country's reach far beyond stadium.And into living rooms. Next, let's discuss the NBA's new plan for its African league. NBA Commissioner Adam Silver recently announced that the NBA's Basketball Africa League, or BAL for short, will transition to a franchise model, selling all 12 teams and allowing each new owner the opportunity to build a home arena. Now, the BAL's 12 teams will start this process in the coming months, according to Bloomberg, but theFranchise model will certainly bring some changes too, such as anchored markets, longer schedules, and increased investment in the league and region. It's essentially a bet on Africa's talent pipeline, media rights and arena development backed by the NBA and FIBA. And for fans, this is the moment they can buy into cities, visit new venues, and enjoy a more sustainable basketball economy on the continent.And the last item in today's playbook is news that Robert Kraft is selling minority stake in the NFL's New England Patriots. Now the terms of this deal are relatively simple. Kraft is selling an 8% stake in the Patriots to two groups. Billionaire Dean Metropolitis is buying a 5% stake in the team, and 6th Street.Acquiring a 3% stake. These minority stakes come with no decision-making power, as the Kraft family will still own more than 90% of the team. But now the Patriots are valid at $9 billion just a slight increase from the $172 million that Robert Kraft paid to acquire the team in 1994. All right, now that we've covered a wide range of topics in the sports world, it's time to talk some football. Joining us now to discuss some of the biggest storylines going on in the NFL is Yahoo Sports senior writer Frank Schwab. Welcome to the show, Frank.You know I have to start with Jackson Dart. Everyone on this knows that I'm a Giants fan. Jackson Dart made his NFL debut this past weekend against the Chargers, got the win in a game that I don't think many people expected them to win. What was your overall just opinion analysis of how he played?

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I, I thought he played OK. Is a typical rookie, made a few mistakes, but overall he gave the Giants a lot of energy. They looked like a different team out there. They really did. They, they rallied around the rookie who can make plays, not just throwing the ball, but running it to very good that way. I, I think this was the right move to to start Jackson Dar. I honestly think it was the right move to start in week one. They decided to give.Wilson a few games and that's fine because now Jackson Dark comes in, you can really start to see what you have with him the rest of the season. And everything I've seen from the preseason on has indicated that he can be a franchise type quarterback. He's been very good, very exciting. Now the, the, the air comes out of the balloon a little bit with the injury to Malik Neighbors, obviously one of the best receivers in football, butHey, uh, it's, it is a long term project for the Giants to have finally a lot of exciting players to build around, not just those two guys, but also Cam Scadibu, their running back, Abdul Carter, defensive end who they drafted really high. Things are looking up with the Giants, and I think that starts really with Jackson Dart, their exciting young quarterback.

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I like your optimism. Brian Da gave him a hug after the game. That was like a you just saved my job hug, so we'll see how that ends up going. But, uh, let's talk about the Ravens. The Ravens are such an interesting team to me because I think a lot of people thought they were going to be a Super Bowl contender at the beginning of the year, and they have looked sort of anything but that. I mean, they had some close games. The Bills game was obviously, uh, really close. They ended up kind of blowing that game, but then they get sort of blown out by the Chiefs this past weekend, Lamar's hurt, just what is going on with the Ravens and sort of where do you think they go from here?

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Yeah, and I mean it was a team that was my Super Bowl pick, so I, I've been very disappointed with them so far. And if you just told me there were 1 and 3, and that's it, I'd say, OK, well, who have you lost to it they're all reasonable losses, of course, you lost to the Bills, you lost to the Lions, you lost to the Chiefs. Those are 3 really, really good teams, but we're not just dealing with a 1 and 3 team. You're dealing with a 1 in 3 team that has a ton of injuries right now, and you mentioned Lamar Jackson.We don't know if he's gonna play this week. We don't know. Look, their buy comes up in a couple weeks. Might they sit him out for 2 games to try to get him healthy? Can they afford to sit him out for 2 games to try and get him healthy? Because if you lose this week to the Texans, all you're 1 and 4. You have to win some games and maybe you push him back to the lineup quicker than expected. The defense is a mess are missing half their secondary, some guys in the front seven, including their star linebacker Roquan Smith. It's just right now it's really, really tough.for the Ravens. Their defense already wasn't playing well before the injuries hit. They rely so heavily on Lamar Jackson, and even if Lamar plays this week, I really doubt that he's going to be close to 100% with a hamstring injury. John Harbaugh already said he couldn't have gone back in the game last week. This was not something where they just were being cautious. He was out like against the Chiefs. So that leads me to believe that that that hamstring was pretty significant. It's tough. It is tough right now for the.Ravens. The only good news for them, I don't think the rest of the AFC North is that good. We've seen the Bengals struggle without Joe Burrow, the Browns aren't that good changing quarterbacks. Steelers are off to a 3-1 start. I don't know if they can really keep up that pace. So maybe the Ravens get well, get healthy, start playing better, they could chase down the Steelers and the AFC North, but it's an upward hill. It is really bad for the Ravens right now, not just a record, but the injuries. The injuries are really, really affecting them.

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Yeah, it's sort of ironic that, uh, reports came out Shado Sanders turned down the Ravens' opportunity to go there because he wanted to play and now he'd have a he'd have the opportunity to play there, but the Browns are obviously starting Dilan Gabriel, which you alluded to there a second ago. What is your expectation for him? Is this sort of just like, let's throw in the rookie, see what we got?

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I, I think they just couldn't deal with Joe Flacco's struggles anymore because if you look, this is not a great spot for Dylan Gabriel at all. It's not just against a a blitz heavy, really tough Vikings defense.It's all the way over in England. You're asking a rookie in his first NFL start to go to another country and start against one of the tougher defenses to figure out in the NFL. Ventral quarterbacks have a tough time figuring out the defense run by coordinator Brian Flores. Now you're asking Dill Gabriel to do it, and they come right back, and they play at the Steelers without a bye week, they, they passed on taking a bye week after going abroad. So this is a tough spot for Dylan Gabriel, no doubt about it.But I think the Browns looked at it like we have a really, really good defense. We're 1 and 3, the season isn't over. We have to try. We, we have to see if Della Gabriel could spark this offense. He looked really good in the preseason. He, he's very good at knowing where to go with the ball, delivering it accurately. He brings some things to the table as a 3rd round pick. It's going to be very, very interesting to see how he looks in a regular season though against one of the one of the stronger defenses in the NFL.

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Yeah, as you mentioned though, the rest of the vision doesn't look great right now, so maybe they're able to get something going, ala Jackson dart and bring a little juice to the team, but we'll see how it goes. Frank, thank you so much for joining us.

8:14 spk_1

Absolutely appreciate it.

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Now, we have to take a quick break, but coming up we've got Stephanie Kwok, the NFL's head of flag football, joining the show to discuss the sport's rapid growth.Welcome back to Yahoo Finance Sports Report. I'm your host, Joe Pompeano. We've made it to the one on one, a conversation where I get to break down news and sports with the key player in the industry. This week we're speaking with NFL Vice President Stephanie Kwok about the growth of flag football. Welcome to the show, Stephanie. Thank you so much for joining us today. Now, as the head of flag football at the NFL, I first just want to start with why the NFL is so interested in growing flag football.

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Absolutely. I mean, flag football, if you played it and I've played for the last 15 years or so, it's just there's so many wonderful things about it. So it is fast paced, it's accessible, it's inclusive, um, just with the fewer number of players on the field as well.And so if you think about all of those qualities, those are all things that get more footballs in more hands. We have so many people who are fans of the game or who would like to be bigger fans of the game, right? In the US, I think around 50% of the NFL's fans are girls and women, but there hasn't been a way for them to really get close to the game.To be on the field to compete at a high school level or to play in college for scholarships, and so flag football is a way for more people to get closer to football and to really build that bond and experience football, not just on through their screen, but on the field as well.

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Yeah, it makes a ton of sense. Uh, maybe it'd be helpful if you can just explain a little bit of the growth that has happened since the NFL started focusing on this initiative, and maybe also some of the implications that we've seen across the broader sports ecosystem, particularly you mentioned women's sports.

10:22 spk_2

Absolutely. So it's really interesting. Flag football has actually been around for a really long time. It's been popular in a recreational setting, both at the college level, at the youth and grassroots level for a while, but as you mentioned, over the last 5, 1015 years, that's when we've really started to see it grow a lot.And I think there are a lot of different reasons for that. There are a lot of NFL clubs who have been leading the way here, who have run local clinics and camps to expose more kids to flag football, because again, that's the way for kids to get into football earlier. It's a way forGirls to get into football as well. And what we've seen too in the last 5 or 10 years is that now that you have all of those kids playing at the grassroots level and loving the game, you're seeing that demand to continue to play. And so in just the last few years, we've gone from flag football being an official championship sport.Um, for in high school girls sports in 4 or 5 states to now it's played in more than 30 states as a high school sport for girls. Um, 17 states have a championship as well.And then you see that demands continuing to grow throughout the ecosystem too. So now that those girls are graduating from high school, they want to play in college, and there are 100+ colleges now that have added flag football.As a varsity sport for women too. And so you're seeing, right, all of that investment that has happened and that interest in the grassroots level continuing to work its way up, driving demand in high school, driving demand in college.And then what's been really interesting over the last few years too is once flag football was added as an Olympic sport in October 2023, now you have that aspirational point at the top of the pyramid where girls and boys can see that there's an opportunity to play at that highest level toCompete for your country to win gold for your country as well. Um, and so I think that that's really poured, you know, fuel on the fire for what was already a really quickly growing and rapidly growingsport.

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We're gonna get back to the Olympics in a second because I just think that's a massive development and and really good for flag football in general, but also the NFL. But when youin your team thinks about sort of the success of this program, right, and how it's built up over the years and what it might look like in the future. It'd be helpful to know just sort of like what KPIs or metrics you guys are tracking to determine that success, right? Is it, uh, participation numbers? Is it the number of states that are doing championships now? Just maybe talk me through a little bit about like how you guys actually gauge the success of the program.

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Absolutely. I mean participation is really our North Star and what we're focused on. So how do we get more football in hands? How do we get more kids who are interested in football or maybe you would be interested in football if they hadn't heard of it, um, to be able to play the game, and that's both in the US and globally.So looking at how do we increase those opportunities for kids, and then as we talked about, right, as kids are able to play a sport and be closer to a sport, um, that's such a big predictor of fandom.And so that's another lens that we certainly have an eye on as we think about how to think about growing that growing the NFL um and growing football both in the US and globally, getting more footballs into hands, growing that participation helps with growing fandom.Um, I think we see it in other sports as well, right? But from some of the numbers we've looked at, if a kid participates in a sport in football when they're when they're younger, they're 3 times more likely to become an avid fan of the sport. And so we're growing the love of football, we're growing fandom for football.Um, currently, but also looking towards the future as well as you think about how do you expand football and how do you expand the NFL, um, to new audiences, uh, new audiences in the US that are important like girls and women, butAlso internationally as well, obviously international growth is a big priority for the NFL among other leagues too. So being able to um reach people internationally with flag football is is another um really useful lover as well.

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One of the things I've noticed is that it feels like there's increasingly more league sponsors that are now activating on the flag football side as well. Uh, one, if you can just confirm if that's true, but also, uh, maybe tell me a little bit more about how those conversations have gone and, uh, sort of what they're interested in.

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Absolutely, yeah, we have a lot of league sponsors that have been interested in flag football and so, um, you know, Nike is a partner that has always really supported um all of our football efforts across both flag and tackle. They actually provide grants, um, uniform grants in every state for high schools that are adding girls flag programs. um, Toyota is another one that comes to mind too.And they sponsor our NFL flag program across all levels. So starting at the grassroots local league level, through to our regional tournaments, through to our national championship that happens in July.You know, and I think with partners, what really resonates with them about flag football, it's it's a lot of things, right? It's as they think about the audiences and the demographics that they want to reach, flag football again, you've got that core audience of families, girls, women.Um, you've got that audience again of international too, as, as a lot of these brands are global, and then if you think about the way that we activate flag football, um, so much is at the grassroots level with kids playing in local leagues and so for brands like Toyota.You know, with their dealerships, that's really important to be able to connect in with the communities. So I think what we're seeing with league sponsors is that flag football is just another way for them to really reach additional demographics. And I think we're also seeing what's been really great to see too is that it's opened up.Conversations with potential new sponsors too, that again are really focused um on how do we reach girls and women, how do we, um, if it's really important to our brand to be accessible, to be inclusive, those are the core values of flag football, and that resonates well with them.

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Yeah, and lastly just covering the Olympics here, uh, number one, I want to know if we're gonna be seeing NFL players competing in the Olympics for flag football, but secondly, I also would love to hear your perspective on just how flag football is helpful for the international ambitions of the NFL.

17:43 spk_2

Absolutely. So we did announce um in May that NFL the owners voted um that NFL players will be eligible to try out for the Olympics. Um, so there is still a tryout process that needs to happen for all of the national teams, um, in the US that's run by USA football, in other countries it's run by each country's federation.Um, and so, you know, I think we, we think and we hope that there will be NFL players out on the field on the men's team, but they will have to go through that that tryout process and qualify for the for that national team. Um, but I think what will be really interesting too is that, you know, we have NFL players from many countries, so we could see NFL players on the US team, but we could also see NFL players on other teams as well andYou know, that that relates, I think, to your question about um flag football being a global sport and how we think about global growth, because having some of those, having flag football on the Olympic stage, on the biggest global stage that there is, having a form of American football there.Um, I think will help so much with just showing how global of a game it actually already is. I think that's something that people don't realize is that flag football is played in 100 countries right now. I actually was just in um Dublin and Paris last week. In Paris, IFAF, which is the International Federation of American Football, they hosted a European continental championship.Um, and the winners of that continental championship proceed to a world championship, which is how you qualify for the Olympics. Um, and so we're starting to look at that Olympic qualification pathway, and it's the big, the largest continental championship that IFAF has ever hosted. So there's already a lot of growth going on there.Um, and then separately the NFL runs NFL flag programs, um, in 15 different countries, and so when we were in Dublin ahead of the Dublin NFL game, we had NFL flag.tournaments in different regions of Ireland with the Steelers, with the Vikings showing up to support those as well. So there's already a pretty large flag football presence in a lot of countries um throughout the world.

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Yeah, you said 100 countries, uh, but here's a little tip for everyone to be included in the Olympics, you have to have a sport that has participated in by at least 70 countries on the male side. I think it's 40 on the women's on the female side. So, uh, flag football is a lot more popular, I think, than people realize, and I'm excited for 2028 to see how, uh, the Olympics help drive that. Thank you so much for joining us today, Stephanie.

20:41 spk_2

Thank you for having me.

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The clock is winding down here, but we have just enough time for some final buzz. So let's talk about John Cena's final WWE match. After participating in more than 2500 WWE matches over the last 23 years, John Cena will officially compete in this final WWE match on December 13th at Capital One Arena in Washington DC.This puts an end to one of the most influential careers in professional wrestling. For over two decades, Senna was the face of WWE, a 17-time world champion whose charisma, catchphrases, and work ethic helped transition the company from the end of the attitude era into a mainstream global success with millions of fans all over the world. When John Cena debuted for the WWE in 2002, the company generated 42 million.Dollars in operating income that year, a 50% decline from the previous year, and something that many sports business experts were concerned about. But last year alone, the WWE generated $681 million in operating income, a 1,521% increase from 2002. John Cena certainly isn't responsible for all of the WWE's financial growth, but he definitely played a big part in the company's success.Now at Capital One Arena this December, Cena will take his final bow in a highly anticipated main event. We still don't know who Cena will face, but the WWE is saying that this will be both a tribute and a farewell. And as you can imagine, this event won't be cheap to attend. The cheapest ticket for Cena's final match is listed for $250 while premium seats in the first row ringside are listed at $11,500 per ticket.But for someone whose mantra has always been, never give up, this final match offers Singer the chance to walk away on his own terms, solidifying his place as one of the greatest performers in wrestling history.We're all out of time, so it's officially game over for this week. Thank you so much to Frank, Stephanie, and all of you for joining us. Please make sure to scan the QR code below to follow Yahoo Finance podcast for more videos and expert insights and catch us every Friday wherever you get your podcasts. If you fall on Amazon Music, just ask Alexa to play Yahoo Finance Sports Report. I'm your host, Joe Pomliano. See you next time.

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