“Hasbro’s Strategic Move: Sells Entertainment One, Retires $400 Million Debt After Layoffs”
Rhode Island-based toy giant Hasbro has made a significant strategic move, selling its Entertainment One film and television business to Canadian-American media powerhouse Lionsgate for a substantial $375 million in cash. The sale, in line with Hasbro’s Blueprint 2.0 strategy, also aims to retire around $400 million of floating rate debt. As part of their forward-looking approach, Hasbro announced they will persist in developing and producing entertainment content rooted in their extensive portfolio of iconic Hasbro brands. Could this put a crimp in plans for any future possible G.I. Joe or Transformers Cartoons? Only time will tell.
Source giftsanddc.com
The sale of Entertainment One comes in the wake of tough sales last year through the holiday season that led the company to cut approximately 1,100 jobs, or 20 percent of its workforce, in the last weeks of 2023.
First reported by the Wall Street Journal and first announced in a memo to employees published in a regulatory filing, the company said the reductions were being made on top of 800 other job cuts that took place earlier in the year. Those initial layoffs were announced last year in a bid to save up to $150 million annually by the end of 2023 as part of its Blueprint 2.0 strategy. At the end of 2022, the company stated it employed 6,490 people.
Unveiled in late 2022, Hasbro’s Blueprint 2.0 strategy sees the company focusing investment on its “most valuable franchises across toys, games, entertainment and licensing” and “implementing an Operational Excellence program designed to deliver $250-$300 million in run rate cost savings over the next three years.”
In an interview with License Global last year, Casey Collins, president of licensed consumer products at Hasbro, described one of the key guiding principles of Blueprint 2.0 as having a “laser focus on the central growth areas for Hasbro,” which may have also contributed to the company’s decision to nix its television and film investments.
“Our Blueprint 2.0 emphasizes fewer, bigger, more profitable brands that showcase our leadership in preschool, games, creativity, outdoor and action brands across an expanded range of consumers, from preschoolers to fans and collectors,” continued Collins in the interview.
According to a report released in Novemeber 2023 by consumer behavior and trend tracker Circana, formerly IRI and the NPD Group, U.S. toy industry sales were sluggish in 2023, with sales revenue declining by 8 percent through September when compared to the same nine-month period in 2022. The report also noted that unit sales were down 9 percent while average selling prices increased 1 percent.
“After record-high sales during the pandemic, 2023 is a period of rebalance for the toy industry,” said Juli Lennett, U.S. toys industry advisor at Circana. “This situation is further amplified by the fact that consumers’ budgets are facing more headwinds than tailwinds this year.”
