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Microsoft buys game maker Activision Blizzard for about $70B

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Microsoft buys game maker Activision Blizzard for about $70B

By MATT O’BRIEN

Microsoft is paying the enormous sum of nearly $70 billion for Activision Blizzard, the maker of Candy Crush and Call of Duty, a deal that would immediately make it a larger video-game company than Nintendo while raising questions about the deal’s possible anti-competitive effects.

The all-cash $68.7 billion deal will turn Microsoft, maker of the Xbox gaming system, into one of the world’s largest video game companies. It will also help it compete with tech rivals such as Meta, formerly Facebook, in creating immersive virtual worlds for both work and play.

If the deal survives scrutiny from U.S. and European regulators in the coming months, it could be one of the biggest tech acquisitions in history. Dell bought data-storage company EMC in 2016 for around $60 billion.

Activision has been buffeted for months by allegations of misconduct and unequal pay. Microsoft CEO Satya Nadella addressed the issue Tuesday in a conference call with investors.

“The culture of our organization is my No. 1 priority,” Nadella said, adding that ”it’s critical for Activision Blizzard to drive forward” on its commitments to improve its workplace culture.

Activision disclosed last year it was being investigated by the Securities and Exchange Commission over complaints of workplace discrimination and in September settled claims brought by U.S. workforce discrimination regulators. California’s civil rights agency sued the Santa Monica-based company in July, citing a “frat boy” culture that had become a “breeding ground for harassment and discrimination against women.”

Wall Street saw the acquisition as a big win for Activision Blizzard Inc. and its shares soared 25% in trading Tuesday, making up for losses over the past six months since California’s discrimination lawsuit was filed. Shares of Microsoft slipped about 2%.

Last year, Microsoft spent $7.5 billion to acquire ZeniMax Media, the parent company of video game publisher Bethesda Softworks, which is behind popular video games The Elder Scrolls, Doom and Fallout. Microsoft’s properties also include the hit game Minecraft after it bought Swedish game studio Mojang for $2.5 billion in 2014.

The Redmond, Washington, tech giant said the latest acquisitions will help beef up its Xbox Game Pass game subscription service while also accelerating its ambitions for the metaverse, a collection of virtual worlds envisioned as a next generation of the internet. While Xbox already has its own game-making studio, the prospect of Microsoft controlling so much game content raised questions about whether the company could restrict Activision games from competing consoles, although Nadella promised the deal would help people play games “wherever, whenever and however they want.”

The acquisition would push Microsoft past Nintendo as the third-largest video game company by global revenue, behind Playstation-maker Sony and Chinese tech giant Tencent, according to Wedbush Securities analyst Daniel Ives.

“Microsoft needed to do an aggressive deal given their streaming ambitions and metaverse strategy,” Ives said. ”They’re the only game in town that can do a deal of this size with the other tech stalwarts under massive tech scrutiny.”

Meta, Google, Amazon and Apple have all attracted increasing attention from antitrust regulators in the U.S. and Europe, but the Activision deal is so big that it will also likely put Microsoft into the regulatory spotlight, Ives said. Microsoft is already facing delays in its planned $16 billion acquisition of Massachusetts speech recognition company Nuance because of an investigation by British antitrust regulators.

Microsoft is able to make such a big all-cash purchase of Activision because of its success as a cloud computing provider. But after years of focusing on shoring up its business clients and products such as the Office suite of email and other work tools, Ives said Microsoft’s failed 2020 attempt to acquire social media platform TikTok may have “really whet the appetite for Nadella to do a big consumer acquisition.”

Pushback against the deal was immediate from consumer advocacy groups.

“No way should the Federal Trade Commission and the U.S. Department of Justice permit this merger to proceed,” said a statement from Alex Harman, competition policy advocate for Public Citizen. “If Microsoft wants to bet on the ‘metaverse,’ it should invest in new technology, not swallow up a competitor.”

White House press secretary Jen Psaki had no comment on Microsoft’s announcement at her briefing Tuesday, but emphasized the Biden administration’s recent moves to strengthen enforcement against illegal and anticompetitive mergers.

Started in 1979 by former Atari Inc. employees, Activision has created or acquired many of the most popular video games, from Pitfall in the 1980s to Guitar Hero and the World of Warcraft franchise. Bobby Kotick, 59, has been CEO since 1991.

Microsoft said it expects the deal to close in its 2023 fiscal year, which starts in July. It said Kotick will continue to serve as CEO. After the deal closes, the Activision business unit would then report to Phil Spencer, who has led Microsoft’s Xbox division and will now serve as CEO of Microsoft Gaming.

Kotick survived a number of executive shakeups at Activision last year after a series of controversies stemming from allegations of a toxic workplace culture. A shareholder lawsuit in August said the company failed to disclose to investors that it was being investigated in California and that it had workplace culture issues that could result in legal problems.

Activision reached a deal in September with the U.S. Equal Employment Opportunity Commission to settle claims that followed a nearly three-year investigation. The agency said Activision failed to take effective action after employees complained about sexual harassment, discriminated against pregnant employees and retaliated against employees who spoke out, including by firing them.

Microsoft has also been investigating its own practices toward sexual harassment and gender discrimination, opening an inquiry last week sought by investors at its annual shareholders meeting in November. The company committed to publishing a report later this year on how it handles harassment claims, including past allegations involving senior leaders such as co-founder Bill Gates.

AP writer Darlene Superville in Washington contributed to this report.

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What’s behind Gleyber Torres’ early season resurgence?

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What’s behind Gleyber Torres’ early season resurgence?

Gleyber Torres, at just 25 years old, has already lived several lives in pinstripes.

He was the anointed one, the heir apparent to Alfonso Soriano, a two-time All-Star and a playoff hero, all before his 23rd birthday.

Then the pitfalls that many people face in their early-to-mid-20s began to rear their ugly heads. The pandemic certainly didn’t help, but even in 2021 as things returned to normalcy, Torres was dreadful at his job. The former top prospect who looked like a pillar of the Yankees’ next great team instead lost his starting shortstop gig. When he was in the starting lineup, he was often buried in the seventh spot.

When Torres was officially moved off of shortstop at the end of last season, his manager said of his defensive issues at the high-pressure position, “I feel like it’s been a weight on him.” Trade talks swirled, as the combination of poor play and the impending free agency of Carlos Correa, Corey Seager and others made Torres seem like the odd man out.

Instead, the Yankees stood pat on free agent shortstops, kept Torres, and traded for a defensive maestro in Isiah Kiner-Falefa. With the stability of knowing that he’d still be a Yankee, plus not having to worry about playing shortstop anymore, Torres has started 2022 with a bang.

As of Wednesday morning, Torres has a 117 wRC+ and .741 OPS, both his highest since 2019, the last time he consistently punished the baseball. After five straight hitless games in mid-April, Torres turned things around with a pinch-hit single in Detroit. Though his eighth-inning knock ended up being mostly meaningless — he was stranded on the bases and the Yankees lost 3-0 — that plate appearance did something to get him back on track.

Starting with that game, Torres has slashed .301/.342/.521. Seven of his 22 hits in that span have gone for extra bases, including four home runs. As a result, his numbers on the young season show a completely different player than the one who sulked through two straight soul crumbling campaigns.

“Last year was a very [hard] struggle for me,” Torres said after driving in five runs in a win over Toronto on May 11. “All the work I put in the offseason, I can show that every time I go to home plate. I mean I can still learn the game.”

Glancing at his numbers, the things that Torres has seemed to learn this year are fairly simple, and also a very common school of thought across Major League Baseball right now. He’s mashing fastballs, putting the ball in the air more often, and as a result, he’s making a lot more hard contact.

In 2021, as Torres’ overall slugging percentage sagged to a career-low .366, fastballs were one of the main culprits. He slugged a not-ideal .352 on heaters, and with two strikes, fastballs resulted in a strikeout 19.6% of the time. This year, though things could still change as he gets more at-bats, Torres is slugging .536 on fastballs. They’re only putting him away 12.9% of the time he gets in a two-strike hole.

Hunting fastballs is an effective strategy for most hitters, but on an even more simplistic level, so is hitting pitches that are meant to be hit. First-year hitting coach Dillon Lawson showed up to his new job with the catchphrase “Hit strikes hard”. Torres appears to have taken that to heart. According to Baseball-Savant, in three key areas of the strike zone — middle-up, middle-down and up-and-in — Torres is hitting the ball hard at a significantly higher rate than he was last year.

Hard contact is particularly damaging when it’s in the air. Every stadium can hold a well-struck grounder, very few will contain an airborne missile. For the last two seasons — the ones Torres would like to forget — he ran a ground ball rate north of 40%. This year, it’s down to 35.2% so far, with fly balls getting above 40% for the first time since 2019. As Rangers’ salty manager Chris Woodward can attest to, sometimes getting the ball in the air at Yankee Stadium leads to “Little League home runs.” Whether they go 320 or 420 feet, a home run is a home run, and Torres is already more than halfway to his home run total from last year.

The other adjustment Torres has made in the season’s first month is swinging more often. His swing percentage has shot up to 76.2%, nearly identical to the 76.3% he had when swatting 38 homers in 2019. This could be a sign that Torres isn’t overthinking things at the plate, a welcome sign for someone who has spoken openly about the mental strife he’s endured.

“First of all, I feel really good,” Torres told reporters last week. “I mean, my swing has gotten better and better. And I’m working hard every day to be the way I want to be. But so far, so good. I think confidence is back and that is the most important thing for me.”

That renewed confidence could also wind up being one of the most important things for the Yankees, a team that, at 27-9, has absolutely been the way they want to be.

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Vikings’ Kevin O’Connell wants to be more than ‘just an offensive coach’

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Vikings’ Kevin O’Connell wants to be more than ‘just an offensive coach’

Kevin O’Connell was an NFL quarterback and an offensive assistant in the league for seven years before being named head coach of the Vikings. But he doesn’t want to be pigeonholed.

“( want to) be visible to the defense, let them know that I’m learning their side of the ball just as much as they are,” the first-year head coach said Wednesday during the first week of organized team activities. ”I can complement them on detailed things they can do within our coverages, within a pressure, how we stop the run, and they can look at me as not just an offensive head coach.”

O’Connell replaced Mike Zimmer, who came from the defensive side of the ball and in eight seasons gave his offensive coordinator lots of leeway. O’Connell, who turns 37 next Wednesday, said it’s “really important” to him for defensive players and those on special teams to know he’s also invested in those aspects of the game.

With that in mind, Vikings linebacker Eric Kendricks was asked if he thinks of O’Connell as more than just an offensive coach.

“He definitely knows what’s going on, but I don’t think he can fairly say that,” Kendricks said with a laugh. “He’s definitely an offensive coach. He definitely wants to light us up on defense, but that’s only going to get us better on defense.”

Kendricks said O’Connell can be valuable working with the defense.

“I notice from him watching film and him going over film on the defensive side of things, he kind of goes over what the offense’s mindset or mind frame is as he’s talking about the defense,” Kendricks said.

DIVERSITY SUMMIT

From Wednesday through Friday, the Vikings are hosting a diversity coaching summit at the TCO Performance Center. It is being attended by 12 young coaches, 11 from colleges, with the intention being to groom them for possible future NFL jobs.

“It’s really a chance for us to get exposed to them from the standpoint of how do they carry themselves?” said Vikings assistant head coach Mike Pettine, who is heading the summit. “We’re going to do mock interviews, film everything and give them feedback on it. They get a chance to be in our meetings. We’ll talk to them as well (about) the NFL culture and expectations.”

Pettine wanted to have such a summit when he Green Bay’s defensive coordinator from 2019-2020 but the coronavirus pandemic hit and then he was fired from his job.

Among the 12 invitees is one woman, Roseanna Smith, director of football operations/running backs coach at Division III Oberlin (Ohio) College.

BRIEFLY

— The Vikings’ top three draft picks all could end up starting but O’Connell is not rushing anything. First-round selection Lewis Cine has been working behind Camryn Bynum at safety, second-round pick Andrew Booth Jr. has been sidelined as the cornerback recovers from groin surgery and second-rounder Ed Ingram is getting reserve snaps at guard. O’Connell said the Vikings have a “teaching progression” for rookies but they “can earn” spots for sure.

— O’Connell has been impressed with how second-quarterback Kellen Mond has looked during offseason drills. “Kellen’s having a good spring so far, working hard, digesting the system,” O’Connell said. During Tuesday’s second session of OTAs,  O’Connell said Mond “made a couple of checks at the line of scrimmage that he wasn’t prepared play-by-play for” but that he “instinctively” adjusted.

— Tight end Irv Smith Jr., who missed all of last season with a knee injury, did some work on the field Tuesday but O’Connell said the Vikings will continue to bring him back slowly. “He’s going to be a major part of what we do,” O’Connell said. “It’s just making sure that we’re doing it in a really responsible way.”

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Jim Hagedorn family suing widow Jennifer Carnahan for medical expenses

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Jim Hagedorn family suing widow Jennifer Carnahan for medical expenses

Family members of the late U.S. Rep. Jim Hagedorn of Minnesota say his widow, Jennifer Carnahan, who is running to replace her husband in Congress, hasn’t come through on a promise to pay them back medical expenses related to his cancer treatments.

Carnahan calls it a political stunt.

Two lawsuits filed Monday by Hagedorn’s mother, stepfather and sister allege they helped pay for cancer treatments he received at Envita Medical Centers in Arizona. Carnahan made a “clear and definite promise” to use inheritance she was to receive after his death to reimburse his family members, according to the complaints.

Carnahan said Hagedorn’s estate is required to go through the probate process in the courts to determine how to divide up his assets and there is nothing more she can do at this time.

“Grief affects everyone differently. Handling the affairs of my husband’s estate should be a private matter,” Carnahan said in a statement. “It’s unfortunate a very simple process has been turned into a political stunt.”

Hagedorn died after a long battle with kidney cancer on Feb. 17. He was told in January that there were no more treatments available for him at Mayo Clinic in Rochester, Minnesota, which is his congressional district, so he sought additional treatments at the facility in Scottsdale, Arizona, the Star Tribune reported.

A suit filed by Hagedorn’s mother, Kathleen Kreklau, and stepfather said they used $10,000 of a $25,000 home equity loan to help cover medical costs. In a separate complaint, Hagedorn’s sister, Tricia Lucas, said she charged $10,000 on a credit card to help cover the costs of his treatment and was promised repayment by Carnahan.

Both lawsuits allege Carnahan was to receive a $174,000 death benefit from the United States government after Hagedorn died, as well $174,000 from his life insurance policy.

Carnahan closed her statement by saying she wishes “Jim’s family well and know this time has been very difficult for all of us.”

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