Hasbro Ups Q1 Entertainment Revenue on Streaming License Deals

Hasbro’s acquisition of Entertainment One continues to bear fruit. The toymaker April 19 reported that first-quarter (ended March 27) entertainment segment revenue grew 22% to $227.5 million, excluding $31.8 million of revenue from the music business, which was sold at the beginning of the third quarter in 2021.

Film and TV revenue increased 14%, driven by deliveries of the television shows “The Rookie” for ABC, which was recently renewed for season five, and “Graymail” for Netflix, as well as the film Deepwater for Amazon and Hulu, and several unscripted shows.

Family brands revenue increased 23%, driven by a multi-title renewal with Netflix for “My Little Pony,” “Transformers” and “Power Rangers” franchises, as well as revenue from the delivery of “Transformers BotBots” to Netflix in the quarter.

Pre-tax operating profit declined 62% to $25.9 million, reflecting the sale of the music business as well as higher program amortization associated with higher deliveries as well as the mix of titles delivered.

Excluding the 2021 results from the music business, for the full year, Hasbro continues to expect underlying revenue growth in the mid-single digits and adjusted operating profit margin to outpace revenue growth and deliver margin expansion.

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“Hasbro has carefully assembled an unmatched portfolio of brand-building capabilities and valuable brands to drive profitable growth and long-term shareholder returns,” CEO Chris Cocks said in a statement. Cocks assumed the CEO position on Feb. 25, following the passing of Brian Goldner.

Hasbro Shareholder Seeks New Board Members, Cites eOne Acquisition as ‘Greatest Failure’

An activist shareholder has notified game maker/Hollywood producer Hasbro it is nominating five members to the company’s 10-member board of directors at the upcoming 2022 Annual Meeting of Shareholders to spur changes at the corporate level. Lionsgate vice-chairman Michael Burns currently sits on the Hasbro board.

Alta Fox Capital Management, the beneficial owner of approximately 2.5% of the outstanding shares of Hasbro, Feb. 17 issued a 100-page presentation outlining steps it claims can return value to Hasbro shareholders.

Specifically, Alta Fox contends Hasbro’s “Brand Blueprint” strategy initiated by late CEO Brian Goldner, who died last year following a seven-year battle against prostate cancer, has been ineffective and spurred “consistent misallocation” of capital resources.

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The shareholder cites Hasbro’s $4.6 billion acquisition of Hollywood producer/distributor Entertainment One (eOne) in 2019 as both a “defining moment” and “greatest failure” for the game maker that has over the years forged lucrative studio (Paramount) movie deals and episodic content (Netflix) license deals around brands such as Transformers and G.I. Joe and My Little Pony.

“This deal diluted Hasbro’s shareholders, added a substantial amount of debt to the balance sheet, complicated the investor narrative and destroyed significant value,” Alta Fox said in a statement.

The investor claims Hasbro’s shares declined 9% the day of the deal announcement and remain dramatically lower than pre-acquisition levels today. At the same time, Alta Fox says Hasbro’s “significant underperformance” over the past five years nonetheless enriched senior executives with around $180 million in compensation.

“Hasbro’s total annual board compensation exceeds that paid to the board of directors of Apple and many other world-class companies of greater scale and with superior results,” read the statement.

In addition to new board members, Alta Fox says Hasbro should spin off its “Wizards of the Coast” (WOTC) game segment (brands include “Magic: The Gathering” and “Dungeons & Dragons”), which the investor claims is a “hidden gem” with a “completely different” growth, margin and valuation profile than the consumer products and entertainment segments.

WOTC upped its revenue 42% in 2021 to nearly $1.29 billion, according to Hasbro. Alta Fox believes the brand could be worth $100 per share when spun off as a standalone publicly traded property. Hasbro shares are currently trading at around $100 per share.

“We anticipate it would be one of the most exciting and valuable specialty gaming businesses in the world, particularly if it were to refocus investment on core intellectual property and eliminate loss-driving, speculative bets on non-core franchises,” Alta Fox wrote.

Hasbro, in a statement, said it received Alta Fox’s letter and said its board and management team — led by new CEO and former WOTC president Chris Cocks — have held discussions with Alta Fox to better understand its views on the game maker’s strategy.

Hasbro said that while it feels it has a “highly qualified, independent, experienced and engaged board,” it would evaluate the notice of nominations, and the nominees, as it would submissions made by other shareholders.

Hasbro Posts 33% Increase in Fiscal 2021 Movie/TV Show Revenue

Hasbro’s re-emergence into movie and television show co-productions continues to positively impact the game manufacturer’s fiscal 2021 pandemic bottom line. The company Feb. 7 reported that fourth-quarter (ended Dec. 31, 2021) entertainment segment revenue increased 61% to $345.3 million from $214.3 million in the previous-year period. For the fiscal year, entertainment revenue increased 24% to $998 million from $805 million in 2020.

In the quarter, the entertainment segment narrowed its operating loss 50% to $17.5 million, from $35 million in the previous-year period. For the year, entertainment narrowed its operating loss 35% to $91.8 million, from $141 million in 2020 on revenue of $1.15 billion — the latter up 27% from revenue of $909 million in 2020.

Through its ownership of Entertainment One (eOne) and partnerships with Hollywood studios and digital distributors (i.e., Netflix, Showtime Anytime, etc.), Hasbro delivered 229 half hours of scripted television content; 695 half hours of unscripted television content; acquired 236 half hours of third-party produced television content; produced seven feature films; and completed production on six series of animated content.

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Specifically, television revenue grew with deliveries of “Yellowjackets,” “Cruel Summer,” “Graymail” and “The Rookie,” as well as sales of other scripted and unscripted programs. New film releases and deliveries are improving, and revenues grew led by Clifford the Big Red Dog, Come From Away and Finch. The successful Netflix release of My Little Pony: A New Generation supported Hasbro’s Family Brands revenue growth in the year, along with content sales for Peppa Pig and PJ Masks, and higher YouTube advertising revenue.

Much of Hasbro’s move into movie and TV show production is due to the late CEO Brian Goldner, who passed away last October after a long battle with cancer. Chris Cocks is set to replace interim CEO Rich Stoddart on Feb. 25.

“Throughout 2021, and finishing with focused execution in the fourth quarter, the Hasbro team did an excellent job in unprecedented circumstances,” chief financial officer Deborah Thomas said in a statement.

Shari Redstone, Bob Bakish Credit Late Hasbro CEO for Viacom, CBS Merger, ‘Transformers’ Movies Success

Following the death of Hasbro CEO Brian Goldner, Shari Redstone, non-executive chair of the ViacomCBS board of directors, late Tuesday hailed Goldner for his efforts in helping her re-unite Viacom and CBS Corp. in 2019.

Goldner, who died Oct. 12 at the age of 58 following a seven-year battle with cancer, had served on the ViacomCBS board. He was instrumental in transforming toy properties “Transformers” and “G.I. Joe” into movie franchises

Brian Goldner

Redstone said Goldner’s “guidance and leadership” not only contributed to the ViacomCBS merger, but also in the execution of a “vision that has significantly shaped the company and will take us well into the future.”

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“While I will always be grateful for the incredible contributions Brian made to this company, what we will all miss the most is his wisdom, his kindness, his commitment, and his friendship,” Redstone said in a statement. “He will always hold a special place in our hearts and he will be forever missed.”

Bob Bakish, CEO of ViacomCBS, said Goldner not only transformed Hasbro from its traditional roots in toys and games into a multi-platform content creator, as a member of the ViacomCBS board, he was an “essential voice” guiding the evolution movies, toys and consumer goods, in addition to championing “our commitment to sustainability.”

Across seven movies, the “Transformers” franchise has generated $5.8 billion at the global box office, in addition to hundreds of millions more in home entertainment and consumer products revenue.

“[Goldner’s] passion for delighting consumers also shone through in his long-time partnership with Paramount Pictures that helped build Transformers into an iconic film franchise,” Bakish said. “We extend our deepest sympathies to Brian’s family and to the entire Hasbro community during this difficult time.”

Hasbro Announces the Passing of CEO Brian Goldner

Hasbro announced that longtime chairman/CEO Brian Goldner passed away following a seven-year battle against cancer. He was 58. His death came just days after he took a leave of absence for medical reasons.

Goldner helped transform Hasbro from toymaker to media company, producing movies with Paramount Pictures and DreamWorks, in addition to acquiring Canadian media distributor eOne in 2019 for $4 billion.

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“Since joining the company more than two decades ago, Brian has been the heart and soul of Hasbro,” interim CEO Rich Stoddart said in a statement. “As a charismatic and passionate leader in both the play and entertainment industries, Brian’s work brought joy and laughter to children and families around the world. His visionary leadership, kindness, and generosity made him beloved by the Hasbro community and everyone he touched. On behalf of the Hasbro family, we extend our deepest, heartfelt condolences to his wife, daughter, and entire family.”

Goldner joined Hasbro in 2000 and was quickly recognized as a visionary in the industry. He was appointed CEO in 2008 and became chairman in 2015. He was instrumental in transforming the company beyond toys and games into television, movies and digital gaming.

The culmination of his pioneering strategy was the acquisition of independent entertainment studio eOne. Goldner served on the board of ViacomCBS and was the chair of the compensation committee.

“Brian’s passing is a tremendous loss for Hasbro and the world,” said Edward Philip, lead independent director of the board. “Brian was universally admired and respected in the industry, and throughout his over twenty years at Hasbro, his inspiring leadership and exuberance left an indelible mark on everything and everyone he touched. A mentor and friend to so many, his passion and creativity took Hasbro to new heights.

Goldner is survived by his wife Barbara and their daughter.

Hasbro CEO Brian Goldner Taking Medical Leave of Absence

Hasbro CEO Brian Goldner is taking a medical leave of absence, effective immediately, with lead independent board member Rich Stoddart assuming the interim CEO position, the toymaker/media company announced.

Goldner, 58, has been dealing with cancer since being diagnosed in 2014. He announced last August that he was undergoing continued medical care for the disease. Goldner has been CEO of Hasbro since 2008.

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“After careful consideration, I have decided to take a medical leave to focus on my health,” Goldner said in a statement. “I feel confident knowing the company will be in the skilled hands of Rich, our highly experienced management team and the best employees in the business. Hasbro’s future couldn’t be brighter as we continue to supercharge the blueprint and build the world’s leading play and entertainment company.”

Under Goldner’s reign as CEO, Hasbro has transitioned from toy and physical game maker, to include Hollywood producer — most notably the “Transformers” and “G.I. Joe” movie franchises with Paramount Pictures and DreamWorks. The franchises have been box office and home entertainment successes, with “Transformers” generating $4.85 billion in global ticket sales across six movies.

In 2019, Goldner spearheaded Hasbro’s $4 billion acquisition of Canadian-based media company Entertainment One (eOne), which included rights to popular preschool TV series “Peppa Pig” and “PJ Masks,” among others.

The Transformers: The Movie — 35th Anniversary Edition

4K ULTRA HD BLU-RAY REVIEW:

Shout! Factory;
Animated;
$29.98 UHD BD Steelbook;
Rated ‘PG’;
Voices of Judd Nelson, Leonard Nimoy, Robert Stack, Lionel Stander, Eric Idle, Orson Welles, Susan Blu, Neil Ross, John Moschitta Jr., Gregg Berger, Corey Burton, Frank Welker, Peter Cullen.

Loaded with some great retrospectives and a beautiful 4K transfer, Shout! Factory’s 4K Ultra HD Blu-ray of the 1986 animated “Transformers” movie is quite a revelation that should excite fans of the franchise, especially those who prefer the classic animated series to Michael Bay’s live-action versions.

In two seasons of the original “Transformers” cartoon based on the popular Hasbro toy line, none of the characters ever died as a result of the never-ending war between the Autobots and Decepticons. They could be severely damaged, but were quickly repaired. At the end of the first season, the entire Decepticon faction fell into a pit of lava, only to be back at full strength without explanation at the start of the next season.

Suffice it to say, storytelling sophistication isn’t one of the prime requirements for a show designed to showcase toys to kids, even though the adventures seemed like fantastic entertainment to their core audience.

So it was quite a shock when The Transformers: The Movie hit theaters in 1986 and spent the first third of its running time wiping out most of the original toy line. In fact, some kids were absolutely traumatized by the infamous death of the beloved Autobot leader Optimus Prime, so much so that Hasbro and Sunbow Productions had to revise plans in the following year’s G.I. Joe: The Movie to kill off Duke (a plot point not enacted on screen until 2013’s live-action G.I. Joe: Retaliation).

By eliminating its older characters to introduce characters from the new toy line, The Transformers: The Movie essentially serves a pilot for the show’s third season, which kicked off about a month after the film hit theaters.

As obvious as the commercial reasons were for swapping out the characters, the fact that a kid’s show was willing to brutally kill off so much of its cast on-screen, including its most popular character, actually made it seem edgy. Contributing to this reputation is the fact that this is an animated movie in which several characters use swear words in a way the show would never have gotten away with.

On top of that, the animation is beautiful, a budgetary step up from a cartoon series that was already visually distinctive. It’s easy to see why the animated movie remains a favorite among “Transformers” in an era of live-action adaptations that seem to sideline the characters in favor of relentless action scenes.

The Transformers: The Movie has received several home video releases through the years, with Shout! Factory, which has released most of the “Transformers” TV shows on DVD the past few years, giving the film a long-awaited U.S. Blu-ray release in 2016 for its 30th anniversary.

For its 35th anniversary, the film has received a new, pristine 4K transfer of the film, which is certainly a definitive presentation. While there are some flaws in the print, it’s clear these are the result of the original animation and film elements, and not part of the remastering process (though high-def tends to make them a bit more noticeable; the introduction of Hot Rod and Daniel has been noticeably blurry in every single home release of the film dating back to VHS).

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Shout! Factory’s new 35th anniversary Steelbook 4K Ultra HD Blu-ray combo pack (4K and regular Blu-ray combo packs in standard packaging will arrive Sept. 28) includes two discs. One offers the film in 4K resolution with HDR in the 1.85:1 widescreen ratio common to movie theaters and HDTVs. The other disc has the film in the 4:3 format of old televisions.

The film was actually animated with television in mind and then cropped for movie theaters, so the 4:3 presentation actually provides more of the overall image, though it’s not as if anything important was cropped out.

The movie is rather notorious for being the final film recorded by Orson Welles, who died five days after his final voice session (and about 10 months before the film’s debut), after complaining to his biographer that he was “playing a toy in a movie about toys who do horrible things to each other.”

Welles played Unicron, the planet-sized Transformer now considered a seminal figure in “Transformers” lore, and the bad guy that didn’t make it into the Michael Bay movies until 2017’s Transformers: The Last Knight. (And to Welles’ point about playing a toy, the planned Unicron movie toy was canceled due to cost and production issues, and the character wouldn’t have a toy released at retail until 2003; Hasbro this year released a deluxe giant Unicron collectible that it crowdfunded at nearly $600 per pledge).

While the film is better known for its association with Welles, it was also the final film for Scatman Crothers, who voiced Autobot Jazz throughout the show’s run. (Interestingly enough, while Jazz is one of the few original characters to survive this film, he’s actually the only Autobot who doesn’t survive the first movie of Michael Bay’s live-action franchise that debuted in 2007.)

The other major contribution to the film’s legacy is its music: Vince DiCola provides the score following his work on Rocky IV, while Stan Bush’s song “The Touch” (originally written for the movie Cobra) has practically become an anthem for the franchise (though it didn’t make it into a live-action “Transformers” movie until 2018’s Bumblebee).

Non-“Transformers” fans might recognize “The Touch” as the song mangled by Mark Wahlberg’s Dirk Diggler character in Boogie Nights that he records for his attempted post-porn career debut album (and possibly implied, within the world of the film, to have been written by John C. Reilly’s Reed Rothchild character, mentioned early in the film to be an aspiring songwriter).

DiCola and Bush are among the many talking heads reflecting on the film in “’Til All Are One,” the 46-minute retrospective documentary made for the 2016 release that carries over here. The piece also includes fascinating anecdotes from several of the film’s voice cast and production team, who are quite up front about the series’ origins as a not-too-subtle toy commercial.

Carried over from the Sony BMG 20th anniversary DVD are the feature commentary with director Nelson Shin, story consultant Flint Dille and voice actress Susan Blu (Arcee); and the featurettes “The Death of Optimus Prime” and “Transformers Q&A.” These were on the 2016 Blu-ray as well.

The Blu-ray also includes previously released trailers and TV spots.

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New to the 2021 edition is a feature-length storyboard version of the movie, using the original storyboard sketches assembled to match the audio of the film. Presented separately are a number of deleted sequences presented in storyboard form, with clips from the movie spliced in to show where the scenes would have gone in the final film.

The 2016 Blu-ray had just a couple of storyboard sequences. The extended storyboard fight between Optimus Prime and Megatron from the 2016 version is presented in the deleted scenes on the 2021 version, with a few modifications. Where the 2016 version was all storyboards, with film audio for the parts that made it into the final version and music for the deleted parts, the new version splices actual film clips in between the deleted storyboards, which are presented in silence.

There’s also a gallery of new character artwork by Matt Ferguson, for the promotional art of the new Blu-ray.

Finally, the 10-minute featurette about Stan Bush, including acoustic performances of “The Touch” and “Dare,” and produced for the 2016 Fathom events theatrical re-release, is included on the new Blu-ray.

All the extras are contained on the regular Blu-ray disc in the combo pack. The 4K disc includes just the commentary.

Legacy extras that were on the 2016 Blu-ray but have been dropped for the new version include the “Cast & Characters” featurette from the old Sony DVD, plus featurettes about the 2016 restoration and box art.

The Steelbook package also includes four cards containing scene stills from the film.

Hasbro Ups Q2 Entertainment Revenue Thanks to Netflix Cartoon Series Licensing

Hasbro July 26 reported TV, film and entertainment revenue of $196.2 million for the second quarter, ended June 30. That was up 48% from revenue of $132.2 million in the previous-year period.

The toy and game manufacturer attributed the gain to content deals for several properties, including “My Little Pony,” “Peppa Pig” and “PJ Masks” for Netflix Kids, as well as growth in YouTube advertising revenue. Television revenue grew with deliveries, including teen drama “Cruel Summer” for Disney’s Freeform and “The Rookie” for ABC TV, among other scripted and unscripted programs.

Overall entertainment revenue, which includes movie, TV content distributor eOne, increased 47% to $226.7 million, from $154.1 million, with adjusted operating income of $9.9 million, compared with adjusted operating income of $9.1 million a year ago.

“Strength across Hasbro’s brands and business backed by strong execution from the entire team drove superb results for our second quarter,” chief financial officer Deborah Thomas said in a statement.

Indeed, total revenue, which includes board games and consumer products, increased 54% to more than $1.32 billion, from $860.3 million a year earlier. Net loss narrowed to $22.9 million, attributed in part to a charge of $101.8 million related to the loss on eOne Music assets held for sale and $7.3 million in related transaction costs.

Shout! Factory Slates 35th Anniversary Steelbook for ‘The Transformers: The Movie’

The Transformers: The Movie will be issued in a limited-edition 4K Ultra HD Blu-ray Steelbook from Shout! Factory, in collaboration with eOne, a Hasbro company, on Aug. 3, in time for the film’s 35th anniversary.

The packaging features new key art by celebrated comic artist Matt Ferguson. The release also includes an all-new 4K transfer of the movie in widescreen with HDR, Dolby Vision and Dolby Atmos, the film in HD full frame on Blu-ray, immersive bonus content including never-before-seen feature-length storyboards, plus four exclusive art cards.

The 4K edition will include new bonus materials such as feature-length storyboards, including deleted, alternate and extended sequences; and the Fathom Events 30th anniversary featurette, including Stan Bush’s acoustic performances of “The Touch” and “Dare.” The combo pack will also include previously released extras including the “‘Til All Are One” retrospective documentary, audio commentary, legacy featurettes, animated storyboards, and trailers and TV spots.

Fans who pre-order from shoutfactory.com will also receive a limited-edition 18×24-inch lithograph with new art by Ferguson, while supplies last.

On Sept. 28, Shout! Factory will issue two additional 35th anniversary editions of The Transformers: The Movie: a standard 4K UHD + Blu-ray combo pack and a Blu-ray + DVD combo pack.

The standard 4K edition includes the all-new 4K transfer of the movie in widescreen along with the HD full frame version and new bonus material. The full-length storyboards and Fathom featurette are exclusive to the 4K editions.

The Blu-ray + DVD combo pack is a reissue of the 30th anniversary combo pack, featuring the movie in HD full frame on Blu-ray as well as a widescreen edition on DVD, and new box art.

These configurations will be available for pre-order later this summer from Shout! Factory.

Under license from Shout! Factory, The Transformers: The Movie Steelbook and standard 4K Ultra HD Blu-rays will also be released in the United Kingdom this September.

Pandemic Drops Hasbro Q1 Movie & TV Revenue 37%

The pandemic continues to impact entertainment distributors as evidenced by Hasbro’s April 27 disclosure that it saw film and TV show revenue decline 37% to $166.4 million in the first quarter (ended March 28). The segment, which includes the acquisition of Canadian-based Entertainment One (eOne), reported revenue of $264 million in the previous-year period.

Overall movie, TV and entertainment revenue fell 34% to $194.3 million, from $292.5 million a year earlier.

Beginning with the first quarter, Hasbro realigned its financial reporting segments and business units, in order to align its segment financial reporting more closely with its current business structure — and ongoing effects of the pandemic.

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Hasbro CFO Deborah Thomas

The new “entertainment” segment saw revenue decline 32% to $218.7 million, from $322.5 million. Operating income turned profitable at $17 million compared with a loss of $64.3 million in the previous-year period. Much of that loss was attributed to costs associated with the $4 billion acquisition of eOne.

Hasbro said entertainment revenue declined due to expected difficult comparisons in the TV and film business from the pre-pandemic ecosystem. The theatrical business continues to be impacted by COVID-related theater shutdowns, whereas in Q1 2020 theaters were open for most of the quarter.

The company said scripted TV show distribution is expected to increase later in the current year and Hasbro is targeting returning to 2019 levels of revenue for the full-year 2021 in the TV and Film business. Adjusted operating profit in movies and TV show production declined on the lower revenue, partially offset by reduced advertising and promotional spend due to the lack of theatrical activity this year versus last.

“Our first quarter started the year well,” CFO Deborah Thomas said in a statement.