Hasbro Enters the Movies

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This presentation explores the strategy of Hasbro putting its brands on the big screen. We will cover the company's history, past strategies, and the terms of the deal.

Text of Hasbro Enters the Movies

  • 1. Marco BoassoRyan HuelsmannTim Stewart

2. Company Background Management Competitors Financial Highlights Alternatives Decision Making How Hasbro Entered the Movies Hasbros Role Results 3. Founded in Providence Rhode Island in 1923 Hassenfeld brothers Polish immigrants Company first operated as textile remnantbusiness Started making school supplies Transformed into making toys from 1930s to1960 1952 Mr. Potato Head (first toy to advertise on TV) 1964 G.I. Joe in 2 years it accounted for 2/3 ofcompany sales - $40 million 4. 1968 went public 1975 discontinued G.I. Joe Company in poor financial situation by 1979 1982 G.I. Joe returned 1984 Transformers toy line is launched as well ascartoon 1980s and 1990s major acquisitions took place GLENCO infant products Knickerbocker Toy Company Raggedy Ann and Andydolls 5. Milton Bradley 1984 Coleco Industries Cabbage Patch Dolls Tonka Corporation and Tonkas Parker Brothers unit, themaker of Monopoly Kenner Products Batman figures and StrawberryShortcake doll 1991 - Established operations in Greece, Hungary,Mexico Nomura Toys Japanese toymaker 6. 1995 Mattel approached Hasbro for merger Hasbro board turned it down due to fear of antitrustissues 1997 Hasbro purchased license for Star Wars$600 Million and gave 7.4% stake of company Steep losses from drop offs in Star Wars toysand Pokemon cards in late 20th century and early21st 21st Century - Company started refocusing ontraditional toy lines G.I. Joe, Monopoly, Mr.Potato Head 7. Alfred J. Verrecchia President and CEO COO from 2001 to 2003 Brian Goldner Chief Operating Officer Executive Producer of the firstTransformer movie Chief Architect of brand drive movies David D.R. Hargreaves Chief Financial Officer 8. Mattel Barbie Hot Wheels Fisher Price American Girl JAKKS Pacific Club Penguin Hello Kitty 9. HASBRO (In thousands)2000 2001 2002 2003 2004 2005Net Rev $3,787,215 $2,856,339 $2,816,230 $3,138,657 $2,997,510 $3,087,627OpProfit ($104,277)$211,330 $219,291 $344,616 $293,012 $310,521Margin(.2%)7.4% 7.8% 11%9.8% 10.1% MATTEL (In millions) 2000200120022003 2004 2005Net Rev$4,565.5$4,687.9$4885.3 $4,969.1 $5,102.8 $5,179.0Op Profit$370.6$579.3$733.6$785.7 $730.8 $664.5Margin 8.1%12.4% 15% 15.8%14.3%12.8% 10. Hasbro has a history ofpurchasing companiesand their brands Milton Bradley (1984) Tonka Corporation withParker Brothers andKenner Brothers (1991) Wizards of The Coast(1999) 11. Pros More product brands fora diversified brandportfolio Expand their limitationswith Hasbroscapital/knowledge Cons Costly Underperformingbrands 12. Entering into Licensingagreements LucasFilmss Star Wars Marvels Avengers Sesame Street Workshop 13. Pros Cons Have access to The shows/movies maysuccessful brands not be successful thus Focus on creating the product lines willtoys/games instead of falter as resultcreating new brands and Product line can stillbrand identitiesfalter despite success of Cost effectivebrand. Remember Legoand Harry Potter Limited supply of brandsavailable to be licensed 14. In the 80s, Hasbro had two animatedseries and comic books showcasing :G.I. Joe A Real American Hero(1984) and Transformers (1984) In addition, spinoffs of these serieswere created during the 90s & early00s showcase on various televisionnetworks, animated movies andcomic books.TRANSFORMERS 80S THEME On 10/10/10, the Hub was launched.A joint venture between Hasbro andDiscovery Communications tolaunch more programsshowcasing its variousbrands. 15. Pros Cons Successful strategy that Limited control overworked in the pastnetworks such as time slots Variety of animation styles Show could get cancelled Best example would be product line will notTransformers spinoffsucceed. G.I. Joe Sigma SixTransformers: lasted 14 episodes.Beast Wars Lots of competition(96-99) against other networks TVprogramming 16. Building off the brandssuccesses from the past, Hasbronow enters the realm offeatured films to extend thesebrands to new heights Transformers Trailer Aligning with certain studiosthat will respect the brands suchas Paramount/DreamWorksand directors that can deliversuch as Steven Spielberg orMichael Bay 17. Pros Cons Expanding market share Cost New technology in movies New area for Hasbro byvs. the anime from the 80s going into this venture Revive/create new product Not finding the rightlines creative talent who will Semi-familiar with therespect the brand orentertainment industrydeliver an exciting moviethrough TV programs Die hard fans disappointed Dont have to worry about or upset with the movienetworks competingagainst TV programs 18. Brian Goldner JoinsHasbro in 2000 Success of Spider Manmovie reinforces idea ofbrand name couldresonate as a motion price Goldner vision re-invent,re-ignite, and re-imaginecore brands to create newexperiences for consumer 19. Studios rejects Hasbro Transformers concept In 2003, Goldner contacts Bonaventura ofParamount Pictures about using GI Joe brand Producers Don Murphy and Tony DeSantooptioned the film rights and began writing aTreatment for Transformers Steven Spielberg signs on as ExecutiveProducer DreamWorks Studios sold to ParamountsParent company Viacom 20. Spielberg recruitsMichael Bay as director Bay travels to RI andmeets with Goldner tolearn: What Transformer brand isabout Stories that had to be told Family tree of charactersand how they relate witheach other 21. Movie released and becomes blockbuster hitduring summer of 2007 Grosses more than $700 million worldwide Spurned 2 sequels that debuted in 2009 and2011 Laid the groundwork for other Hasbro brandsto enter the big screen Re-sparked the brand on a massive scale thatother brands like Kre-O work solely adjunctto the Transformers brand 22. MovieDomesticForeign Gross Total OpeningAwards Gross ($) ($) Worldwide Weekend ($) Gross ($)Transformers 319,246,193 390,463,587 709,709,780 70,502,384 Nominate(2007) with #1 in for 3 4,011 theaters OscarsTransformers: 402,111,870434,191,823 836,303,693 108,966,307NominateRevenge of the with #1 in for 1Fallen (2009)4,234 theaters OscarG.I. Joe Rise of 150,200,000 151,800,000 302,000,000 54,700,000 NoneCobra (2010)Transformers:352,390,543 770,805,646 1,123,196,189 97,852,865 N/ADark of thewith #1 inMoon (2011)4,088 theaters 23. GI Joe 2 Retaliation Risk Battleship Stretch Armstrong Ouija Candyland Monopoly Micronauts Clue 24. No money from box office revenue Revenues from movie tied to product sales: Transformer toy sales for 2007: $470 Million up from $30 million when Goldner joined in 2000 25. 20062007 2008 2009 2010Net Revenues $3,151,480 $3,837,557 $4,021,520 $4,067,947 $4,002,161Operating $376,363$519,350 $494,296 $588,598 $587,859ProfitOperating 11.9% 13.5%12.3%14.5%14.7%Profit MarginNet Earnings$230,055$333,003 $306,766 $374,930 $397,752EPS (Diluted) $1.29 $1.97$2.00$2.48$2.74Cash & Cash $715,400$774,458 $630,390 $636,045 $727,796EquivalentsLong-term $494, 917 $845,071 $709,723 $1,131,998 $1,397,681Debt (currentportions)