Disney and Hasbro Agree to Marvel Contract Extension
In an effort to continue playing nice together, toy giant Hasbro and entertainment king Disneyjointly announced today that they are extending for two years a licensing agreement between them for the Marvel Entertainment properties.
The House of Mouse paid $4 billion to acquire Marvel in 2009, just after Hasbro had signed a licensing agreement for the more than 8,000 characters in the comics portfolio including Spider-Man, The Avengers, and Iron Man. The deal ran through 2017 and you could hear the collective sigh of relief from Hasbro investors at the time that the deal was done before the acquisition was made.
Then this past October, Disney dropped another $4 billion to acquire Lucasfilm, the owner of the Star Wars franchise, which Hasbro also had a licensing agreement with that ran through 2020.
With both properties now a part of the Magic Kingdom, the entertainment giant sought to align both contracts with its partner to cover all film and television properties. As a result, both contracts with Hasbro will run through 2020 and in return Hasbro will guarantee to Disney an additional $80 million in royalties for the Marvel deal.
Additionally, as there are now three more Star Wars movies planned by the conclusion of the Lucasfilm contract than were anticipated when the original Hasbro-Lucasfilm deal was signed, the toymaker will guarantee the House of Mouse $225 million in royalties related to those movies and related merchandise, $75 million of which will be paid upfront and the balance in accordance with the films' theatrical releases.
The first of the new sequel films. Star Wars: Episode VII, is expected to hit theaters in the summer of 2015.
Much of Hasbro's revenues is tied to movie tie-ins. Its first-quarter boys segment revenues fell 20% from the year-ago period in large part because the 2012 quarter had benefited from the release of Star Wars Episode I-The Phantom Menace in 3D. That was partially offset by an increase in Marvel-related revenues due to the release of Iron Man 3 this past May.
Its second-quarter earnings released just this morning showed another 35% drop in sales due to difficult comparisons from last year in the Marvel category.
Sales of girls' toys jumped 43% in the quarter, driven by sales of My Little Pony and Furby. Board game sales climbed 19%, with sales of Monopoly and Magic: The Gathering both climbing. Sales of other games, such as Twister and Jenga, also increased.
Sales for the preschool category rose 4 percent, benefiting from strong sales of Play-Doh, Playskool Heroes, Transformers Rescue Bots and Sesame Street products.
Noting both portfolios provide extensive content for both companies to build upon for years to come, Hasbro CEO Brian Goldner said, "We are delighted to expand our agreements with Disney, Marvel and Lucasfilm and continue building on our extensive and successful long-term relationships."
Similarly, Bob Chapek, Disney's president of consumer products said, "By delivering innovative and engaging play experiences for consumers all around the world, Hasbro is uniquely positioned to continue to translate the rich characters and storytelling of our Marvel and Star Wars franchises."
-- Material from The Associated Press was used in this report.
The article Disney and Hasbro Agree to Marvel Contract Extension originally appeared on Fool.com.
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