Hasbro’s chief executive said the toy giant’s renewed focus on its roots by selling eOne was a hard decision but the best one for the company, which will save in terms of management distraction and cash.
“I am a passionate believer in the power of games and, more generally, the power of play, to build relationships with consumers. I think that has been the secret sauce of Hasbro for the hundred year we’ve been in business,” Chris Cocks told investors at the Goldman Sachs media conference today.
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He acknowledged that “eOne brought a lot of assets to the table. But after three years of integrating them, less than 5% of our efforts at the film and TV division were around driving Hasbro brands.” Also, “the category had quite a bit of margin contraction with the accelerated shift to streaming, more proprietary distribution, and the decline of theatrical – particularly for the mid-sized and kind of long-tail films that eOne tended to specialize in.”
“While it’s painful to have to make the decision to divest something,” he said during a Q&A, “It was absolutely the right thing to do.”
Hasbro last month announced a $500-million deal to sell Lionsgate eOne’s scripted and unscripted TV production (inluding The Rookie, Yellowjackets and Naked and Afraid franchises), all film production and related global distribution, a 6,500-plus title content library and Hasbro’s interest in eOne’s Canadian film and TV business. Hasbro is retaining the Family Brands division, which houses franchises like Peppa Pig and PJ Masks.
“I think it was the right thing for that [eOne] team. Lionsgate is a much more natural fit for them in terms of their distribution prowess and management capability,” Cocks said.
“And I think it’s right for Hasbro. It frees up a lot of management focus and frees up some cash for us. And I think from an investment perspective, it is much easier to understand the business.”
The stock, which is trading at about $73, is up about 15% since the deal was announced. Lionsgate has said it expects to close by year end.
Hasbro bought eOne in 2019 for $4 billion. It sold the company’s music business to Blackstone in 2021 for $385 million.
The planned sale of the film and TV business is split into $375M in cash plus the assumption by Lionsgate of production financing loans.
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