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Hasbro retreats from Hollywood with $500M eOne sale

Photo: John Keeble/Getty Images

Hasbro's $500 million sale of film and TV studio Entertainment One to Lionsgate on Thursday morning marks an unglamorous end to the toymaker's grander Hollywood ambitions.

Why it matters: Hasbro bought eOne for $4 billion in 2019. With the Lionsgate deal, it will now have sold off the majority of that for just $885 million.

The big picture: Adding eOne was part of former CEO Brian Goldner's plan to turn the toymaker into a bigger media player.

  • The crown jewel of that deal — popular children's brands like Peppa Pig and PJ Masks — remain with Hasbro as they were folded into the company's wider merchandising operations.
  • Those remaining pieces account for 15% of eOne's total business and operations.
  • Hasbro found early success in films based on its toys with the "Transformers" franchise — for which eOne was not the studio, due to a prior production deal with Paramount.
  • But since then, the Hasbro-eOne combo produced box office disappointments including the "G.I. Joe" spinoff "Snake Eyes" and "Dungeons & Dragons: Honor Among Thieves."

Of note: Hasbro is shifting its Hollywood play to a licensing model, CEO Chris Cocks said Thursday morning during the company's earnings call.

  • There are still 30 projects in development based on Hasbro brands, Cocks said, which will now be under Hasbro Entertainment.
  • That division will be run by Olivier Dumont, the current head of Family Brands.
  • "We expect to move to an asset-light model for future live-action entertainment, relying on licensing and partnerships with select co-productions," Cocks said. "It's a plan about recentering Hasbro."

Between the lines: While "Barbie" is likely to strut herself to a $1 billion box office this weekend, Hasbro's struggles with the rest of its toy catalog serve as a warning sign to Mattel about the difficulties of sustaining Hollywood success.

Catch up quick: Goldner died in 2021 following a lengthy battle with prostate cancer. His successor Chris Cocks then launched a review of the business in early 2022.

  • Around that same time, Hasbro came under fire from a pair of activist investors who criticized the eOne purchase and called for the company to offload it.
  • Hasbro sold eOne's music business to private equity firm Blackstone for $385 million in 2021.

Meanwhile: Lionsgate's studio spinout plans have drawn M&A chatter about the future of its film and TV assets, which include more than 18,000 titles. Adding eOne only figures to further that conversation.

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