Barbie, Transformers and Different Paths – The Hollywood Reporter

Mattel and Warner Brothers. ‘Barbie’

Everett

In September 2018, Mattel CEO Ynon Kreiz revamped the toy company’s Hollywood aspirations, launching a film division with plans to bring game franchises to the big screen in licensing and partnerships with studios after options lapse on big titles, including Sony Pictures’ adaptation. Barbie with Anne Hathaway attached to the star.

A year later, its competitor, Hasbro, set its sights far beyond licensing its big franchises (Dungeons and Dragons, Transformers, G.I. Joe): It wanted to become Marvel Studios and make its own movies, too. So Hasbro snapped up Entertainment One for $3.8 billion in August 2019 to further those ambitions.

Fast forward to this year and the paths diverge – should you create and buy or license content? Do you go all out or let the partners play a bigger role? –played for toy companies, with Hasbro changing course toward Mattel’s licensing playbook and partnerships with major studios.

Mattel Barbie, made by Warner Bros. Pictures. , surpassed $1 billion at the summer box office. Meanwhile, Hasbro sold its eOne for $500 million, a few billion less than its purchase of the product, after its own bets on becoming Marvel didn’t go as planned.

When Hasbro acquired eOne, Hasbro CEO Brian Goldner’s longtime strategy was to work with Paramount Pictures to produce and distribute film and television content based on Hasbro’s toy brands like Transformers, GI Joe, and My Little Pony. eOne Produced by Paramount Film, Dungeons & Dragons: Honor Among Thievesgrossed a staggering $208 million worldwide after its release last March, while Paramount Transformers: Rise of the Monstersthe next installment in the series based on the Hasbro toy, has grossed $433 million worldwide.

Before significantly reducing its film and television production footprint with the sale of eOne, Hasbro priced the one-off independent studio for 6,500 title libraries it could mine for multiplexed animation IP, such as Peppa Pig And PJ Masks Dramas such as Yellow jackets. Gamemaker behind My little pony and Play-Doh also expected the eOne acquisition would allow Hasbro to find licensing revenue from newly acquired family brands and develop a non-core IP not part of a separate long-term deal with Paramount to co-finance projects distributed by the Hollywood studio worldwide. (Other TV shows supported by eOne include Cruel summer for Hulu and the recruit for Netflix.)

But after Goldner’s death in 2021, Chris Cox, his successor as CEO of Hasbro, has set out to transform the toy maker into a digital gaming giant, rather than an entertainment powerhouse as Goldner had envisioned. This pivot placed eOne in a non-core position for the company’s new strategy. Ultimately, Hasbro saw value in focusing on its toy business, which put eOne up for auction late last year, before Lionsgate revealed on Aug. 3 the $500 million acquisition ($375 million in cash, subject to certain price adjustments). purchase, and the assumption of production financing loans).

Hasbro is now focusing on converting the legacy board games of popular franchises like Magic: The Gathering And Dungeons and Dragons in digital video games. For Hasbro, the sale of eOne and its expansion into digital toys put rearview mirror films on the basis of toy franchises that have become box office disappointments.

Hasbro’s strategy in Hollywood brings Mattel closer, which is taking popular toys whose brands are known to the masses and looking to run them as franchises in partnerships with major studios. Here Mattel is developing a feature with Universal based on Rock ‘Em Sock ‘Em Robots, which Vin Diesel is linked to star in, as well as an MGM adaptation of the Polly Pocket doll line, starring Lily Collins, and a Hot Wheels movie with a bad robot production by JJ. Abrams. “For a long time, we were just licensees — so people would come to us and pick our brands from us — and we had no control over the storytelling,” Mattel Films executive vice president Elizabeth Basin said in March on a SXSW panel, months ago. affiliate Barbie launch. “And now we’ve seen the power of games in the marketplace as storytellers and we’ve realized that if we’re not in the driver’s seat, those stories might not be told the way we want them to be told.”

Wall Street has revised its forecasts for gaming companies accordingly. Roth MKM analyst Eric Handler lowered his current-year financial forecast for Hasbro based on the company’s second-quarter earnings report. “A full downward revision of our estimates for 2023 is driven by weakness in the entertainment sector, much of which is being sold and will be gone before the end of the year,” he explained. “The announced sale of eOne’s live assets will accelerate the deleveraging process and increase margin assistance in 2024.”

Analyst Stifel Drew Crum also praised the eOne sale. he wrote in a report, describing the idea behind “addition with subtraction” manipulation.

Wall Street watchers say Hollywood Reporter That Hasbro’s desire to own and operate its own film and television production and distribution businesses, based on former CEO Goldner’s vision, was an entertainment strategy that could have worked, but it came with major risks. For example, the company has gone beyond its core competencies that it has traditionally focused on. Many experts said owning eOne also complicated Hasbro’s asset mix, using its cash flow, while achieving what they described as subpar financial returns. After all, film is a capital-intensive business and was led by a hit.

Not surprisingly, then, this has led to suspicions, including a failed proxy battle in which an activist investor pushed Hasbro to break up its fast-growing company. Coast Wizards and the digital games division to unlock shareholder value. Some also state that the COVID-19 pandemic has further hurt Hasbro’s ambitions in Hollywood due to production and cinema closures. The result: Wall Street preferred the Mattel model to impressing Hollywood.

Talking about your great success Barbie movie, Mattel is betting on its two-decade partnership with Warner Bros. To create products for the masses. The toy giant, which continues to develop and produce films based on the company’s toy brands, has renewed its licensing agreement with Warner Bros. Pictures. Discovery Global Consumer Products, making it the official licensee for toys, dolls, vehicles and games for more than 50 WBD brands and franchises.

Among Mattel’s WBD brands are toys based on the DC Comics universe and Harry Potter franchise, as well as programs such as Ted LassoAnd friends And Seinfeld. Mattel is a licensing partner of Warner Bros. About 20 years ago.

On Mattel’s earnings call in late July, Kreese doubled down on the company’s approach to Hollywood after the release of Mattel Barbie. “This is a defining moment for Mattel in a showcase of the cultural resonance of our intellectual property, our ability to attract and collaborate with top creative talent and the capabilities of our franchise management organization,” said the CEO. “This also speaks to the potential for Mattel Films and the significant progress in our strategy to capture the full value of our IP.”