Hasbro Facing 'Difficult Changes' and Investor Lawsuit

This is SERIOUS folks!

Hb has its mitts on TF, SW,Marvel and Disney! The last 3 are Disney territory. Whether we like to admit it or not, SW and Marvel have been getting a bit too left political, heck, even ESPN (another Disney property) aka the boring sports channel because it no longer talks about sports has suffered greatly with low ratings and subscribers leaving.

https://awfulannouncing.com/espn/bob-ig ... field.html

Nothing wrong being SJW and all but there is a time and place for it (not with our suspension of disbelief hobbies playtime). Not to mention a recent study (see link)

https://www.moreincommon.com/hidden-tribes/

shows only about 8% to 10% of the American populace are the noisy nutjobs! The rest are just the busy normal average Joe and Jane who care for nothing of the white noise (i.e. APOLITICAL).

Yet when big companies like Disney placate to these groups who don't even invest (i.e. SPEND) in such products, alienating the silent majority, ..........there bye damaging the brand.

Trouble is, it was Hb who also got hit with huge INVENTORIES of unsold SW products (Marvel Comics isn't doing too good either). I am willing to bet this took a huge chunk of the "black" Hb profits leading it to bleed red (don't get me started with the clusterfrck of the last two TF movies and the overkill with Bumblebee).

Let's pray that Hb and its stockholders recover from this or ELSE......might take TF down with them in the drain.

fenrir72 wrote:This is SERIOUS folks!

Hb has its mitts on TF, SW,Marvel and Disney! The last 3 are Disney territory. Whether we like to admit it or not, SW and Marvel have been getting a bit too left political, heck, even ESPN (another Disney property) aka the boring sports channel because it no longer talks about sports has suffered greatly with low ratings and subscribers leaving.

https://awfulannouncing.com/espn/bob-ig ... field.html

Nothing wrong being SJW and all but there is a time and place for it (not with our suspension of disbelief hobbies playtime). Not to mention a recent study (see link)

https://www.moreincommon.com/hidden-tribes/ I

shows only about 8% to 10% of the American populace are the noisy nutjobs! The rest are just the busy normal average Joe and Jane who care for nothing of the white noise (i.e. APOLITICAL).

Yet when big companies like Disney placate to these groups who don't even invest (i.e. SPEND) in such products, alienating the silent majority, ..........there bye damaging the brand.

Trouble is, it was Hb who also got hit with huge INVENTORIES of unsold SW products (Marvel Comics isn't doing too good either). I am willing to bet this took a huge chunk of the "black" Hb profits leading it to bleed red (don't get me started with the clusterfrck of the last two TF movies and the overkill with Bumblebee).

Let's pray that Hb and its stockholders recover from this or ELSE......might take TF down with them in the drain.

Take your politics elsewhere.

howwwwww... I give them so much money!!! aherm

hope it gets sorted for our hobby's sake and for their employees

Like it or not, the more the Disney stuff circles the drain the more this will affect Transformers. Take whatever stance you want on all this, from looking at it economically to talking about the culture but the cold hard reality is: Hasbro will lose money if nobody wants to buy the MCU and Star Wars stuff and, as it happen, Star Wars merchandise has been doing poorly for a variety of reasons which go far beyond debates about the movie qualities, including having too much products on the shelves which cost too much and children not buying them.

fenrir72 wrote::-(

This was a poorly written, borderline irrelevant post that reflects poorly on the Seibertron.com community. I urge you to do better in the future and focus on the facts presented rather than associate them with carefully selected talking points that have nothing to do with the article posted.

Truth hurts?

Coptur wrote:Truth hurts?

It sure does.

The "Man Children" aren't buying them anymore. That's what hurts.

Fact: Iger is Disney CEO. He knows more than we do.
Fact? Too much SW every year diluted the brand. Open to debate. As if He'll admit to the public the real reason.

My linking to his statement on the status of ESPN not related? Really? Not related?

Hb got the exclusive rights to distribute a lot of Disney products. Star Wars being one of them. It's underperforming to put it lightly (the toys). Why it ain't moving? Some say the kids don't buy them anymore. Trouble is, it's the demographic with a lot of disposable income that isn't buying (i.e. the Man Children aka as you and me).

Why aren't they buying? What has dampened their appetite to buy? Aren't media like movies, comics etc the means to brainwash "encourage" the fans to buy? I only posited a very probable reason why no one is buying.

With SW hurt, Hb got hurt too! Hb get hurt, TF is affected too! Now we get these investor revolts.

Again, let's hope sanity returns to both sides (Hb and Disney) and just produce great APOLITCAL products that promotes escapism/suspension of disbelief.

ScottyP wrote:

fenrir72 wrote::-(

This was a poorly written, borderline irrelevant post that reflects poorly on the Seibertron.com community. I urge you to do better in the future and focus on the facts presented rather than associate them with carefully selected talking points that have nothing to do with the article posted.

It was rambling, but the basic point is valid. The more the companies that Hasbro is producing licensed items for do things to disenfranchise the fans (ie Kathleen Kennedy & Rian Johnson) the more it's going to affect the sales of the products that Hasbro sells and hurt Hasbro's bottom line. My figure buying habit was seriously affected by the lunatic rants of the earlier mentioned individuals. You throw out hate at your fan base, it's going to affect your bottom line.

Solo, although not a great movie was a fun one, was negatively affected by the the drama surrounding TLJ, so again product didn't sell (I still want figures from that line but I figure they'll end up on clearance soon enough). Star wars had really been a power house for Hasbro, until the people running Star Wars derailed the gravy train.

The quality of the Disney princess dolls hasn't really improved since Hasbro took over. They have more of a variety of faces and heads, but the same crappy articulation the Mattel ones had. They put a lot into the Decedents original line, and that sold well, but the sequel dolls are shelf warmers until clearanced out.

Marvel Comics could possibly be a thing of the past in the near future. Disney is already starting to license out characters to other companies. That is a direct result of the current batch of writers being well, I'll say it SJWs. Probably my favorite Comic in recent years was the Kamala Kahn Ms Marvel, then they got super political with it, and I stopped reading, although I did just buy her Marvel Rising doll, along with Ghost Spider.

Marvel Studies is more or less keeping the political stuff to a minimum, as is the Animation side of Marvel, but if they go the way of Star Wars, you'll see the Marvel figure revenue drop significantly as well.

That will have a negative effect on the Hasbro Bottom line, and Transformers will be negatively affected. Look at the number of terrible stickers they used in the POTP line (i mean seriously they had stickers on Starscream that you couldn't press flat because of details on the parts the stickers covered), when the previous lines had few on anything smaller then Titan Class. We could see more cheaply made figures for more money.

I didn't realize children's toy companies including messages of inclusiveness, diversity, honor, and the like counts as "leaning towards the left." But then again, I'm not paranoid.

Toys are tanking because electronics sales are up. Toys to life is surging again, and console sales are up (electronics are much more expensive and versatile than plastic figures). Hasbro's other IP's are doing average or about to be rebooted. (Transformers has gone full G1 to recenter the brand.) Xmas is around the corner and people tend to wait last minute. Marvel just dropped a huge cliffhanger and people won't be hype till Infinity War 2 unless they pull of a sleeper hit. The economy in general took a hit the past few months.

There's no need to get worked up and digging for hidden meanings. Companies restructure all the time. Things start anew. Trends and fads ebb and flow and come and go. You gotta take the good with the bad because with every upturn comes down, and Hasbro is trying to prepare so they can continue on with what they're doing.

Besides, they're multi-billion dollar corporations. They're fine as long as the CEOs don't destroy the company for personal gain like TRU America. And I'm sure keeping the Transformers IP around with tangible merch is more profitable then dropping it all.

We would see cheaply made figures anyway because that's how they maximise profit (by minimising costs). It has nothing to do with people who, at a fundemental level are trying to make things better and fairer. A minority don't go about it the best way but considering the hate that gets thrown at them, I'm not suprised there's an escalation in arguments between the opposing groups.

Now the article in question is light on details, like why they are being accused of security fraud.

Edit:

Also what Short Circuit put, all of it.

Look I have to pitch in here, mostly because there's clearly some bullshit here. Alright so the foremost thing about the toy market is it is changing, and not because of politics. The foremost reason is Hasbro and Mattel aren't the only game in town anymore. Unlike 1977, 1997 and 2007, the best outlet for star wars and marvel isn't the hasbro market; there are multiple third party companies like Hot Toys, MAFeX, and the Bandai Tamashii Nations; these companies do give the best representations of relevant movie centirc characters, like Captain America, Iron Man, Rey, and Kylo ren.

Sure they be comparatively more expensive import figures, but when you consider someone my take a couple of weeks and multiple trips to a target or Walmart to find a midling to decent 20-25 dollar black series/marvel legends figure. The cost differential isn't to extreme compared to buying a 50 to 60 dollar highly articulated, highly accurate S.H Figuarts from BBTS or AmiAmi in the comfort of your own home. Figures which will be released in japan on a set scheduled with equal distribution and will (probably) be at your house in 5 business days at the most. I work at a vintage toy store in downtown PDX, and the other day this kid, 7-10 was buying some oldschool vinyl Kaiju, when his mom chimed in "Don't you have the S.H MonsterArts gigan?". I'm not saying this is all kids and all collectors, but what i'm saying is the market for bigger better more expressive toys is open, it's not just collectors, it's also kids too, and most of those toys happen to be imports. I'm not saying this is the only reason, just that it's a major factor.

Hasbro will always have the comic exclusive interpretations of marvel characters and obscure star wars characters. One of my favorite black series Force Awakens figures is the Guavian bounty hunter and there ain't no way in heeeeeeell MAFeX is going to make him. Also for those people saying "oh star wars is too political with SJWS and thats why the toys aren't selling" people must be forgetting the absolute glut of Phantom Menace, Attack of The Clones, and Revenge of the Sith toys, and those movies are a hell of a lot weaker than TFA, TLJ, Rogue One, and the Han Solo Goes Solo, Solo Movie.

Short Circuit wrote:I didn't realize children's toy companies including messages of inclusiveness, diversity, honor, and the like counts as "leaning towards the left." But then again, I'm not paranoid.

The toys may not be political, but the people who direct their source material certainly are. And that's not on its own a bad thing, but it seems like in today's age if you don't agree with their stances 100%, they don't want you as part of their audience. That friction does not help with sales.

All of this is nonsense and it has nothing to do with the original post, it's all off-topic.

If you think the number of stickers on a Starscream figure has ANYTHING to do with big business entertainment and the culture wars, you lack the maturity to read investor reports and economic news, including posts like this one.

If you want to criticize contemporary corporate mores in favor of representation, there are plenty of alt-right websites for that. This is a toy forum, for Primus' sake.

I could get all raging "SJW" about things, but I'll say this instead.

Adult collectors make up a portion of toy consumers.

Straight white male collectors (what I infer to be the "disenfranchised" group of fans people are mewling about) make up a portion of adult collectors.

Politically conservative (or anti-liberal) collectors make up a portion of that "disenfranchised" demographic.

Collectors that pay attention to off-screen political twitter drama make up a portion of those conservative collectors.

Collectors that care enough about that drama to amend their shopping habits make up a portion of the collectors who pay attention to the drama.

Let's be generous and say that 50% of toy buyers are adult collectors, 50% of those collectors are part of a "disenfranchised" demographic (I have to use quotes because I can't even type that with a straight face), 50% of that demographic is anti-liberal, 50% of those anti-liberal collectors pay attention to what directors & content producers say on platforms like Twitter (which is really unlikely since only 20% of Americans use Twitter), and that 50% of those people will forego buying a Solo action figure because of something the director of another movie said that offended them.

.50 ^ 5 = 0.03125

So in the extremely unlikely situation that all of those strata are split 50/50, that accounts for a 3% dip in toy sales, and only in the licensed, collector-marketed toy sales (e.g., Star Wars: Black Series), which themselves make up only a portion of Hasbro's products. And that also doesn't consider the corresponding increase in toy sales that would come from inclusive story-telling and content creators voicing progressive morals.

Meanwhile, child population growth is slowing due to people having fewer kids, and children are continuing to shift their interest to interactive media (e.g., tablet games, consoles) for their indoor entertainment. I suspect that has a LOT more to do with poor brand performance than some anti-SJWs feeling butt-hurt because companies are paying attention to other demographic groups.

what about the less quality and still more expensive than last years products and of course products that are not good even if the materials and prices were better?

im not going to say anything else about lack of articulation or simplified toys, that honestly depends on each persons preferences but overall lower quality and higher prices, and lackluster products design isnt going to do any good to hasbro at this point

Let's not forget mass retail action figures aren't really a thing kids want these days. Videogames have been the hot 'new' thing (not so new anymore, but still) and have long relegated action figures to a secondary, if not tertiary role next to just wasting time on your phone. We might forget this when we collect Transformers because we still buy toys in our '30 and '40.

Star Wars has had problems on multiple angles, namely:
-The toys are overpriced.
-There is too much merchandise, since there is more than just the playset, figures and lego but also a ton of stuff like huge out of scale Stormtroopers and lightsaber builders and other tacky crap nobody wants, neither kids nor adult collectors.
-Said stuff is constantly on shelves due to Star Wars now being a yearly thing.
-The new movies haven't really been good at selling the new characters to an audience, meaning what does sell even decades later are your Darth Vaders and Luke Skywalkers.
-A sizable chunk of people didn't like The Last Jedi and Solo for a variety of reasons and that hurt merchandise sale.

Of course this is going to hurt Hasbro's bottom line when entire sublines of useless Star Wars merch end up clogging shelves, taking immense space in a market where toys increasingly sell less. It's basic economics: they offered too much of stuff nobody wanted. Simply spacing these movies by 2-3 years in between would have alleviated some of the problems.

Think the biggest issue was toys r us’ demise. But hey I’m just an adult tyo collector...

Admittedly, I dont speak Legalese, but I think we are all getting the wrong c9nclusion here.

What I am interpretting (and very likely could be wrong) is that a few highwr ups did something illegal, which could be embezzling or falsely reporting money or lying on Quarterly Profits. The Investors want the Truth so they launched an investigation, and as a way of keeping the organization as a while clean, what we are seeing as "Layoffs" is is a nonbiased way of saying "Hasbro is electing to let go of the people under indictment and or the people under indictment and those guilty of assisting (secretaries etc.) In the lie." Possibly, a few innocent parties may get cut as well to make up the dofference of what might be owed to investors.

And again, I cpuld ve totally wrong. And maybe the Accused did what they did to hide that everythung was not hunky dory in sales, but that just doesnt feel likevthe whole stpry here.

In my experience, Star Wars and TLK stuff shelfwarmed HARD. There's still legions of Sqweeks and Barricade Deluxes on shelves, and the amount of assorted 5POA SW figures rotting away isn't pretty either. In the case of SW especially, not helped IMO by how bad some of those figures look. Like, I know a pocket money toy is never going to stand up to a Figuarts, but when the majority of the figures on sale are these mushy little 5POA things that wouldn't look out of place in the late 70s (and don't even have the same charm as the older figures) and the few decently poseable figures are too expensive for the young 'uns (£20 is a lot for a 6" figure in the context of little Jimmy's pocket money) and too poorly made for us overgrown children (compared to the Figuarts or Mafex offerings, Hasbro's SW figures just aren't very good) you can see why they didn't exactly fly off shelves.

So between that and TRU's demise I'm not surprised to see Hasbro struggling. The supposed fraud/whatever charges though, that is concerning.

Just a quick note for everyone: the lawsuit alleges misrepresentation, but is not itself evidence of fraud. The suit itself basically boils down to a very simple idea: the collapse of TRU had a significant impact on Hasbro's business and Hasbro knew more about the risk from TRU than they disclosed to investors. This kind of thing happens all the time when there are big stock drops.

I mention all of this as a casual observer, I have no personal or professional stake in any of this. Lawsuits are never good news, but there's nothing in this that should concern casual toy collectors. This is up to their legal teams and insurance.

Black Hat wrote:In the case of SW especially, not helped IMO by how bad some of those figures look. Like, I know a pocket money toy is never going to stand up to a Figuarts, but when the majority of the figures on sale are these mushy little 5POA things that wouldn't look out of place in the late 70s (and don't even have the same charm as the older figures) and the few decently poseable figures are too expensive for the young 'uns (£20 is a lot for a 6" figure in the context of little Jimmy's pocket money) and too poorly made for us overgrown children (compared to the Figuarts or Mafex offerings, Hasbro's SW figures just aren't very good) you can see why they didn't exactly fly off shelves.

I have dozens of fully articulated Episode III clone troopers. It's a collection I was able to collect as a less than prosperous undergrad, built over ten years ago, but they look a hell of a lot better (and are definitely more fun to play with) than almost any of the toys out there now.

AcademyofDrX wrote:Just a quick note for everyone: the lawsuit alleges misrepresentation, but is not itself evidence of fraud. The suit itself basically boils down to a very simple idea: the collapse of TRU had a significant impact on Hasbro's business and Hasbro knew more about the risk from TRU than they disclosed to investors. This kind of thing happens all the time when there are big stock drops.

I mention all of this as a casual observer, I have no personal or professional stake in any of this. Lawsuits are never good news, but there's nothing in this that should concern casual toy collectors. This is up to their legal teams and insurance.

Thank you for the clarification

Flashwave wrote:...What I am interpreting is that a few higher ups did something illegal, which could be embezzling or falsely reporting money or lying on Quarterly Profits. ....as a way of keeping the organization as a while clean, what we are seeing as "Layoffs" is is a non-biased way of saying "Hasbro is electing to let go of the people under indictment and or the people under indictment and those guilty of assisting...

AcademyofDrX wrote:....The suit itself basically boils down to a very simple idea: the collapse of TRU had a significant impact on Hasbro's business and Hasbro knew more about the risk from TRU than they disclosed to investors....

There's nothing in this that should concern casual toy collectors. This is up to their legal teams and insurance.

I think both of you are right. TRU being probably a consumer of at least a quarter of hasbro's inventory and then dropping off the map screwed them hard, and the distribution woes and pallets worth of brand new titans return stock showing up at discount outlets are part of the result. I wouldn't be surprised in the slightest if someone in finances got a word from a higher up to change some ones and zeros around in order to help make things work.

The lawsuit doesn't allege that kind of fraud. The excerpt below is directly from PR wire copy:

"According to the lawsuit, defendants throughout the Class Period made false and/or misleading statements and/or failed to disclose that: (1) Hasbro's relationship with Toys ''R'' Us was becoming increasingly important to Hasbro's business, but Toys ''R'' Us was in far worse financial condition than was being publicly reported; (2) Hasbro was experiencing significant undisclosed adverse sales issues in two key markets - the United Kingdom and Brazil - which were negatively impacting Hasbro's efforts to grow sales in those markets; and (3) as a result of foregoing, defendants' statements about Hasbro's business and prospects were materially false and misleading and/or lacked a reasonable basis at all relevant times. When the true details entered the market, the lawsuit claims that investors suffered damages."

Companies are required by law to tell their shareholders how their business is doing. These statements have to be truthful. The alleged fraud is basically that before the TRU bankruptcy, Hasbro said that things were okay, and after they weren't very okay. That's the gist of it. Ther no expectation that there are fudged numbers in a ledger, but if Hasbro knew the risks of the bankruptcy and didn't tell investors, that would make those statements false. I wouldn't recommend reading too much into this stuff.

AcademyofDrX wrote:The lawsuit doesn't allege that kind of fraud. The excerpt below is directly from PR wire copy:

"According to the lawsuit, defendants throughout the Class Period made false and/or misleading statements and/or failed to disclose that: (1) Hasbro's relationship with Toys ''R'' Us was becoming increasingly important to Hasbro's business, but Toys ''R'' Us was in far worse financial condition than was being publicly reported; (2) Hasbro was experiencing significant undisclosed adverse sales issues in two key markets - the United Kingdom and Brazil - which were negatively impacting Hasbro's efforts to grow sales in those markets; and (3) as a result of foregoing, defendants' statements about Hasbro's business and prospects were materially false and misleading and/or lacked a reasonable basis at all relevant times. When the true details entered the market, the lawsuit claims that investors suffered damages."

Companies are required by law to tell their shareholders how their business is doing. These statements have to be truthful. The alleged fraud is basically that before the TRU bankruptcy, Hasbro said that things were okay, and after they weren't very okay. That's the gist of it. Ther no expectation that there are fudged numbers...
.

Could we put this in the News Article, cause this really helps shape context more than the vague snippets in the post. Its not about Hasbro being in trouble because of shelfwarming or bad toy drsigns, its about lying and lying about the TRU impact.

Caelus wrote:I could get all raging "SJW" about things, but I'll say this instead.

Adult collectors make up a portion of toy consumers.

Straight white male collectors (what I infer to be the "disenfranchised" group of fans people are mewling about) make up a portion of adult collectors.

Politically conservative (or anti-liberal) collectors make up a portion of that "disenfranchised" demographic.

Collectors that pay attention to off-screen political twitter drama make up a portion of those conservative collectors.

Collectors that care enough about that drama to amend their shopping habits make up a portion of the collectors who pay attention to the drama.

Let's be generous and say that 50% of toy buyers are adult collectors, 50% of those collectors are part of a "disenfranchised" demographic (I have to use quotes because I can't even type that with a straight face), 50% of that demographic is anti-liberal, 50% of those anti-liberal collectors pay attention to what directors & content producers say on platforms like Twitter (which is really unlikely since only 20% of Americans use Twitter), and that 50% of those people will forego buying a Solo action figure because of something the director of another movie said that offended them.

.50 ^ 5 = 0.03125

So in the extremely unlikely situation that all of those strata are split 50/50, that accounts for a 3% dip in toy sales, and only in the licensed, collector-marketed toy sales (e.g., Star Wars: Black Series), which themselves make up only a portion of Hasbro's products. And that also doesn't consider the corresponding increase in toy sales that would come from inclusive story-telling and content creators voicing progressive morals.

Meanwhile, child population growth is slowing due to people having fewer kids, and children are continuing to shift their interest to interactive media (e.g., tablet games, consoles) for their indoor entertainment. I suspect that has a LOT more to do with poor brand performance than some anti-SJWs feeling butt-hurt because companies are paying attention to other demographic groups.

HALLELUJAH!!!!!! THANK YOU

Flashwave wrote: Could we put this in the News Article, cause this really helps shape context more than the vague snippets in the post. Its not about Hasbro being in trouble because of shelfwarming or bad toy drsigns, its about lying and lying about the TRU impact.

It's just an accusation of "lying," there's no reason to grant that it could be true. This lawsuit is very simple: investors lost money because of a couple big events, and they wish they hadn't. Did Hasbro know more about the risk than they disclosed? Certainly possible.

Speaking personally, I wish this stuff didn't get covered on fan blogs. The article writers can't give it the necessary context, and forum visitors don't want to talk about business considerations, they want to talk about the products and what they think Hasbro should do differently. (Or they want to make baseless assertions that fan protests have anything to do with the corporate bottom line.)

I do appreciate covering the business in passing, but speculating about the causes or consequences of a business reorganization is fundamentally different than trying to guess about upcoming remolds or exercising wish fulfillment about future toys.

If you want to worry about the industry, spend less time reading quarterly updates at places like this and pay attention to the broader industry trends. I don't know how much business Hasbro does with Barnes & Noble, but they'll probably be the next big retailer to either go under or significantly change their business structure. As others have mentioned, the toy industry has been trying to adapt to broader consumer change with challenges. Hasbro competitors like Lego are also going through restructuring including staff cuts, with likely changes to product lines as a result. And the US and other mature markets are only part of the equation; Lego, Hasbro, and others have been trying to expand into new markets with inconsistent success. Put another way, there's a lot more going on than what can be effectively represented in this type of article.

...

No need to watch the WCBS vid, Comicsgate is trash. I'm not surprised that movement continues to try to expand into other fan communities.

AcademyofDrX wrote:No need to watch the WCBS vid, Comicsgate is trash. I'm not surprised that movement continues to try to expand into other fan communities.

To be fair I don't watch any video like that as they are all examples of the blind leading the blind. The extreme left rose to combat the extreme right yet neither see that they are pretty much a mirror of the other one. Big problem is that none of this is really affecting what the article is about. Hasbro need to develop solutions to problems about being relevant in an increasingly digital age. Even the star wars toy lines of yesterday would have faced hefty competition if released today. Times change and we must change with them.

Cost Hasbro pays for the Star wars franchise fee. Just another rant link:

http://www.jeditemplearchives.com/2018- ... s-license/

https://corporate.findlaw.com/contracts ... -inc2.html

https://corporate.findlaw.com/contracts ... o-inc.html

http://archive.fortune.com/magazines/fo ... /index.htm

https://www.awn.com/news/hasbro-and-luc ... rough-2018

https://variety.com/2013/biz/news/hasbr ... 200566115/

https://seekingalpha.com/news/2951666-d ... s-products

https://www.forbes.com/sites/greatspecu ... 0e2ed03d6e

Reputable sources I guess

Some revisions more than likely has been applied since Disney took over Lucasfilm

Edit:

" Usually, a licensee only pays royalty fees once the minimum guarantee has been paid off. So if Hasbro paid $250 million on release of Episode I they would only pay royalties once their Star Wars toys net sales exceed $250 million for that Episode.

And these royalties were increased to 20% of net sales in 2015.

Hasbro’s Star Wars license for the past 21 years cost them a total of at least $730 million plus at first 18% and then 20% of Star Wars toys net sales.

Hasbro’s operating margin in the past years was between 11.5 – 15.5%, in 2018 it’s a little more than 12%. Which simply means one thing: first Lucasfilm and now Disney make MORE money off the Star Wars toys Hasbro makes than Hasbro themselves.

Please think about this for a while.

Now, a more common royalty fee in the toy industry is something like 10%. In other words: the Star Wars toy license is the most expensive toy license out there. Which is why only a big player, a global toy company such as Hasbro, is able to afford it."


And finally some other interesting points from the agreement:

Lucasfilm/Disney need to approve everything
Should Hasbro fail to meet agreed upon quality standards Lucasfilm/Disney can order Hasbro to stop production of said toy at once!
Hasbro needs to provide Lucasfilm/Disney with samples of toys on a regular basis
Lucasfilm and Hasbro agreed upon a minimum sales level. The exact level has been redacted, but it’s very interesting to know that such a minimum sales level does exist. Any consequences as to what happens if Hasbro failed to meet that projected sales level have been redacted, but it’s safe to assume that Hasbro would face consequences
Hasbro is required to exercise reasonable commercial efforts to guarantee minimum sales levels are met and exceeded (they need to advertise, for example)
Hasbro has to provide Lucasfilm/Disney with detailed and accurate records, Lucasfilm/Disney may also, not more than once a year and with advance notice, perform an audit and check all the numbers at Hasbro headquarters
Hasbro can’t sublicense anything without explicit approval by Lucasfilm/Disney
And finally, which may be of interest soon, there’s also a paragraph about China in the agreement. The section about China states that should China ever lose its most favored nations trade status and therefore render performance impractical or even impossible then both parties will get together and discuss any appropriate actions that can be taken. So if trade tariffs of 20% or more should be imposed upon toys made in China, you can expect Hasbro and Lucasfilm/Disney to meet in a panic room
One final word: the licensing agreement is from 1997. Most likely it was altered, most certainly amended and changed in the meantime, but it was never really fully renegotiated, as far as I understand it, it was merely extended several times. So while some details may and probably will be different now I believe that most of the things written in that agreement are still valid today in very similar form.

Now, in light of all this… what do you think? Do you think the Star Wars license is worth it? Have you developed some more understanding as to why Hasbro does things the way they do? Remember, Disney is the one who makes most of the money here. Hasbro owns nothing when it comes to Star Wars. In light of this it makes perhaps a lot of sense not to invest too much money in all new sculpts for a relaunched TVC with uncertain performance at retail and most likely much lower margins and instead to use the sculpts they already have and put them on a Vintage Card. The Black Series has the advantage of having a higher MSRP/wholesale price and therefore, most likely, higher profit margins, provided that manufacturing costs are about the same for TVC and Black Series.

And this also tells us one more thing: other than maybe Hasbro, Mattel, Lego or Bandai no niche company such as Neca, Mezco etc could ever afford the exclusive, worldwide Star Wars license, Mafex can afford it because it’s neither exclusive nor worldwide. Consider this next time you want someone else to take over the SA 3.75 inch Star Wars line. The license is more expensive than what these companies probably earn in a year. It would bankrupt them.

Only if Star Wars was dead, truly dead and no longer financially successful, some small company might be able to afford the exclusive, worldwide license. But I suppose no one here wants that. We should all wish and hope that Star Wars will thrive and that Hasbro is willing and able to pay the enormous license fees and royalties in the future.


So in summary:

Hasbro needs to pay a minimum guarantee to Lucasfilm/Disney, over the past two decades that guarantee amounts to at least $730 million Hasbro also has to pay royalties. Royalties were 18% for a long time, but then in 2015 Disney increased the rate to 20% of net sales, which is higher than Hasbro’s operating margin which is usually something between 11-15%

All things considered Hasbro has paid well over $1 billion to Lucasfilm/Disney in the last 21 years. Probably about $1.5 billion

Lucasfilm/Disney is the owner of everything Hasbro designs and creates for Star Wars

Update: the royalty rate for the prequel period was corrected, originally it said that the rate was north of 15%, so 15% or more (since this is all the info I found), the Netflix documentary “The toys that made us” gives the rate as 18%, the text and some numbers have been updated accordingly

So yup! SW is causing a big bad red instead of black in Hasbro's bottom line. Nope, it's not really affecting Hasbro at all. Just a few NPCs getting the pink slip

Remember folks! This only applies to Star Wars and not TF but heck, Hasbro is footing the costs and Disney is laughing all the way to the bank (last I heard, NOT anymore!)

http://www.jeditemplearchives.com/2018- ... s-license/

To quote:

"Given a royalty fee of 18% and then 20% (since 2015) accumulated royalty fees for the period between 2010 – 2015 may amount to about $260 million. But then there are the royalty fees for the time between 1997 and 2010, when Star Wars toys were probably a lot hotter than in the period between movies, when no new movies were on the horizon and only The Clone Wars was on TV. So my very, very rough estimate is that Hasbro may have paid about $1.5 billion in minimum guarantees and royalties to Lucasfilm in the past 21 years."


"These are a lot of details. All you need to remember is that the Star Wars toy license is insanely expensive and that Lucasfilm/Disney most likely make more money off the toys Hasbro makes than Hasbro, if we take the operating margin as an indicator of how much money Hasbro does keep in the end"

"This might explain the lack of accessories in recent years, the sometimes unpainted weapons and it might also explain why there are so many exclusives for the Black Series, since many exclusives have a higher MSRP (and wholesale price) and therefore maybe a higher profit margin."

" It may also explain why Hasbro loves the Black Series, since it will probably cost roughly the same to make as TVC but has a much higher MSRP and therefore wholesale price, meaning a higher profit margin.

"Hasbro needs to pay a lot of money to Disney and it’s quite likely that back in 2012/13 TVC was just no longer viable. It may also explain why there are so many repacks in the relaunched line to keep costs down. And it most certainly explains why Star Wars toys are so expensive.

"It’s not because Hasbro is too greedy, it’s because Lucasfilm/Disney demand a very high price for the privilege of making Star Wars toys.""

"Oh, that Barge? 20% goes to Disney. That‘s $100 for each and every Barge sold. Disney will be happy.
And that covers the financial aspect of the licensing agreement."

No wonder Hasbro is HURTING!

Nope. Their SW issues aren't at all affecting their other lines. Nope.

Hasbro have been hit by the "Get Woke, Go Broke" cancer in the Star Wars arm. Unless Lucasfilm get some chemotherapy, it may seriously damage Hasbro. And bofore that happen, better cut off that limb and tranfers that hot potato to Mattel or something.

-Kanrabat- wrote:Hasbro have been hit by the "Get Woke, Go Broke" cancer in the Star Wars arm. Unless Lucasfilm get some chemotherapy, it may seriously damage Hasbro. And bofore that happen, better cut off that limb and tranfers that hot potato to Mattel or something.

AcademyofDrX wrote:

Top tier counter argument.
This is SURE to convince me of... something...

You don't want a good faith discussion, you want a thoughtless debate. I'm not here for flame wars.

I gave your comment more consideration than it deserved just by reading it.

Star Wars is an expensive license? Of course it is. Recent underperformance of the Star Wars brand hurt Hasbro's bottom line? They have said as much in previous earnings reports. The job reductions and organizational restructuring are in response to negative business pressure? Obviously, that's how these things happen.

There's a coordinated effort by corporate management and creators to promote left-wing ideology, and in response a silent majority of apolitical individuals have banded together and are so significant a commercial force that they can snap their fingers and bring companies to their knees? That the broader economic trends that advisor firms document for their investors are "fake news" and the real cause is rabid internet fandom?

That's absurd on its face. I could spend time challenging the assumptions in the Star Wars backlash--like that TLJ's box office success and Solo's failure prove that TLJ is the problem!--but that doesn't have anything to do with anything.

Both of you are desperate to devolve every thread into the culture war du jour and I don't want a part of it. You're not here to analyze or discuss the financial results, you just want to spread internet hate.

To be fair, whilst TLJ was a financial success overall, it still considerably underperformed compared to what Disney wanted out of it, and Solo's failure could be linked directly to people being soured on Star Wars by TLJ (especially in China, where it was so hated that they removed Star Wars from the title of the Solo movie in an attempt to avoid the association with such a disliked movie). Regardless of your stance on these matters, there's little doubt that TLJ was not a resounding success.

I mean, personally I'm of the opinion that Star Wars really should have been left well alone and that the story was pretty much well enough wrapped up as it was. The Prequels, love them or hate them, at least set the scene for the OT. The Sequels were just extra guff tacked on to the end of an already complete story. If Disney wanted to release new SW stuff they could have just released the original un-doctored cuts of the OT like people have wanted for years now and they'd have been rolling in money. The recent trend of rebooting/making sequels to old properties that didn't need them needs to stop, as does the trend of calling anyone who doesn't like it an "-ist". It didn't work with Ghostbusters, it didn't work with Ocean's 8 (incidentally my mum went to see it for a laugh and she described it as the worst movie she had ever watched), it didn't work with The Predator and it isn't working with Star Wars.

Most of what you said is nonsense, but more importantly, none of this has anyone anything to do with Transformers!

Black Hat wrote:as does the trend of calling anyone who doesn't like it an "-ist".

Hahaha, you almost had me. You right-wing culture warriors, you can't help yourselves. You want to pretend that you care about the property or the fandom, but at the end of the day, you're not fooling anyone.

I'm not going to convince you that your poisonous ideology and behavior are a problem. I'm not going to get you banned off of the internet.

I am going to say loudly and repeatedly, this trash does not belong here.

AcademyofDrX wrote:Most of what you said is nonsense, but more importantly, none of this has anyone anything to do with Transformers!

Black Hat wrote:as does the trend of calling anyone who doesn't like it an "-ist".

Hahaha, you almost had me. You right-wing culture warriors, you can't help yourselves. You want to pretend that you care about the property or the fandom, but at the end of the day, you're not fooling anyone.

I'm not going to convince you that your poisonous ideology and behavior are a problem. I'm not going to get you banned off of the internet.

I am going to say loudly and repeatedly, this trash does not belong here.

So apparently anyone who thinks that blaming the failings of a piece of media on the audience being bigots or whatever is a bad idea are "right wing culture warriors". OK then. Also I like how you suggest that anyone with right-wing beliefs is incapabale of caring about a property or fandom, that's real nice.

FWIW all I was saying was that TLJ not performing as well as it could have may have contributed to Hasbro's troubles (as may the other movie with "The Last" in its title with toys made by Hasbro, The Last Knight, which also underpeformed and also shelfwarmed like crazy). I'm not attacking anyone who liked the film- if you like it then that's fine at the end of the day- but I believe it is both relevant and true that TLJ toys underperforming for whatever reason did not help Hasbro's financial stability.

If you're upset by what I had to say then I apologize, but I can assure you that was not my intent and I'm a little puzzled by your reaction.

A leftist will take any critiscism as "hate speech". It show cultist mentality. Take just a look at #walkaway on YouTube. People are begining to be tired of the Far Left dictatorship and authoritarism.

Women, blacks, gays, trans, many are speacking out against what the Left have become. I was a leftist myself most of my life and I'm appaled at what "my side" have become.

"Get woke go broke" have NOTHING to do about "hate". It's about not pushing an agenda and RESPECTING the consumer and his concerns. That's it.

Actually on hasbro's account, the last knight was a success, it's been pointed out before that hasbro makes its money when the retailer buys the stock.

The big thing hurting hasbro is just the changing of the times. Let's just keep things on Transformers.

Fandom isn't limited to any political perspective, there should be space for everyone. And everyone's beliefs inform their relationship with the property.

What I take issue with is using media properties as a proxy fight in a larger cultural war. There's an entire cottage industry around that now, and they use Twitter to amplify the message. If you don't know what I'm talking about, that's great. If you do, then you know what's going on and you're being intentionally obtuse in bad faith.

-Kanrabat- wrote:"Get woke go broke" have NOTHING to do about "hate". It's about not pushing an agenda and RESPECTING the consumer and his concerns. That's it.

"Get woke go broke" IS an agenda, and it's trash. But I don't want to debate alt-right talking points here. You want to complain about the far left, go make a thread on Breitbart, it has no place here.

Whatever, glad I learned about the mute button

AcademyofDrX wrote:Whatever, glad I learned about the mute button

It's a fantastic feature, just a heads up, they'll still show up if someone quotes them.

But yeah ... let's leave political leanings out of this and stick to facts.

EDIT: Never mind, bad timing on my part.

AcademyofDrX wrote:Fandom isn't limited to any political perspective, there should be space for everyone. And everyone's beliefs inform their relationship with the property.

What I take issue with is using media properties as a proxy fight in a larger cultural war. There's an entire cottage industry around that now, and they use Twitter to amplify the message. If you don't know what I'm talking about, that's great. If you do, then you know what's going on and you're being intentionally obtuse in bad faith.

That's 100% the point I was trying to make. Sure, you cannot please everyone, but pandering ONLY to the vocal minority is BAD business. And when there is criticism, don't attack the fans. The Ghostbusters 2016 fiasco is one example. And some of those extreme vocal staff that attack the fans are finally getting fired.

One thing I noticed for all these years as a transformers fan is that our community can be VERY vocal and "toxic". I wasn't around when the 2007 movie was first announced but oh boy, it must have been glorious! Anyway, we can all agree that most Transformers Bay movies are complete trash. But they are mindless fun trash. No political agenda was pushed. Ever. Plus when very mean criticisms was thrown at Hasbro, no Hasbro staff EVER attacked the fan. No matter what. Results?
MONEY.
Billions in profits and a franchise that was revitalised.
People pay money to enter a fantasy world to escape reality's bullcrap. No matter what "side" we are on. We want to escape and have fun not to be lectured on. It's something Hasbro have never forgotten. And I'm very, very grateful to them for that.

Hope that the Disney tendrils will stop chocking Hasbro. Usually, when a branch make a corporation lose money, they cut it off mecilessly. Contracts shenanigans may prevent Hasbro from escaping for now. Still, I'm confident. Hasbro went through worse crisises than this.