Why Entertainment One Is For Sale From Hasbro – The Hollywood Reporter

In December 2019 Hasbroto home GI Joe, Transformers and Dungeons and Dragons brands signed a $3.8 billion deal Entertainment OneA popular cartoon producer with a library of 6,500 Peppa pig and PJ mask.

The toymaker soon regretted the move, calling the timing of its purchase of the studio “unfortunate” last May when Hasbro faced off against activist investor Alta Fox in a proxy fight trying to break up its gaming division. exaggerated.

Hasbro is now offloading eOne, and on November 17 hired bankers to explore a sale of the studio, but keeping the IP. Peppa pig. It has appealed to investors who have called for the company to sell part or all of eOne, reinvest in fewer, more profitable properties, and work with outside partners to reduce costs and risks. Wall Street analysts applauded the move.

“There are a number of non-core assets in this business that aren’t necessarily part of the Hasbro flywheel, so scaling back eOne makes a lot of sense,” said Eric Handler of MKM Partners. The analyst added that Hasbro will continue to build on its family-owned content business and, like rival Mattel, can rely on production deals with studios, steamrollers and popular talent across Hollywood. “They just need to have enough infrastructure and staff to turn the Hasbro IP into a successful movie or TV project,” Handler noted.

The idea to become a producer of Marvel Studios in Hollywood was conceived by CEO Brian Goldner, who died in October 2021. His successor, Chris Cox, is more focused on building Hasbro into a gaming powerhouse, including profitability. Magic: The Gathering franchise.

Instead of going through the expensive process of producing a title, Hasbro can use its IP catalog for projects at Paramount like the 2023 release. Transformers: Rise of the Beasts and Dungeons and Dragons: Honor Among Thieves.

Hasbro investor Fred DiSanto wrote in a letter to management in May: “Hasbro doesn’t have to own eOne to bring it. Dungeons and Dragons Like George RR Martin didn’t need to bring his production studio to the big screen Game of Thrones to live.”

The news about the sale process is not surprising. The gaming giant emphasized that the previous sale of eOne’s music business for $385 million was “not a strategic element of our brand plan”. And in August, the division’s chief executive, Darren Throop, announced he would leave the company when his contract expires at the end of 2022.

Most everything else at eOne now favors Hasbro’s focus on fewer, bigger brands. “This is a positive thing, because it will allow Hasbro to more quickly divest and divest from non-core businesses that are difficult to plan for execution and distract from the strategic parts of the business (toys, tabletop and digital games),” said D.A. Davidson analyst Linda Bolton Weiser wrote in a Nov. 17 note.

Hasbro hired JP Morgan and Centerview Partners on Nov. 14, just days after the gaming giant said in a Nov. 14 investor note that the gaming giant was overselling its Magic: The Gathering properties and “destroying long-term value.” stated that it remains for sale. collectible cards led to a sharp sell-off in stock prices.

Regarding the sale process, the company said in a statement, “This process is expected to take several months. In the meantime, Hasbro’s entertainment team will continue to operate under the eOne brand.”

DiSanto, a Hasbro investor and director of Ancora Holdings, was also optimistic, saying that “spinning off eOne will improve the company’s long-term position, reduce investment, reduce operational complexity and reinvest in core segments and high-end brands.” announced. strong growth trajectory.”

Hasbro shares were up $2.45, or a little more than 4 percent, at $58.42 at the close on Thursday.

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