Hasbro has orchestrated a “definitive agreement” to sell its eOne film and TV business to Lionsgate for around US$500 million, as it works on streamlining operations to support its core toy and games business. 

Kidscreen previously confirmed that the sale does not encompass popular eOne kids and family brands such as Peppa Pig. Important assets that are involved include a content library of around 6,500 titles; active productions like Yellowjackets and The Rookie; Hasbro’s interest in the Canadian film and TV operations of eOne; and the eOne scripted business, which controls rights to select Hasbro-driven family-friendly shows such as Play-Doh Squished for Amazon Prime Video. 

Selling the eOne film and TV business to Lionsgate will help Hasbro shift its core focus back to “the power of play,” said Hasbro CEO Chris Cocks on a Q2 earnings call this morning. And the company will use the money from the sale to pay off around US$400 million in debt.

Lionsgate’s US$500-million spend consists of US$375 million in cash and several production financing loans. The deal is expected to close by year’s end, subject to conditions and regulatory approvals. 

“As part of the sale, we expect to move to an asset-light model for future live-action entertainment, relying on licensing and partnerships with select co-productions,” said Cocks on the earnings call. 

Hasbro has also created a banner called Hasbro Entertainment that will launch after the sale closes. Olivier Dumont, head of eOne Family Brands and the architect behind the success of some of Hasbro’s biggest brands, is being promoted to president of this new division that will develop, finance and produce content based on Hasbro-owned brands, as well as creating and bringing new IPs to market. Hasbro has more than 30 film and TV projects in the works, including several brand expansion vehicles for its Transformers and GI Joe franchises, plus Play-Doh, Dungeons & Dragons and Magic: The Gathering. 

“At the highest level, [the sale of eOne is part of] a plan about recentering Hasbro on what has helped us create one of the most valuable portfolios of brands in toys and games: the timeless power of play,” said Cocks. 

Hasbro’s net revenue for Q2 finished at US$1.2 billion, down 10% from the same quarter last year. And the company sustained 11% decreases in both its consumer products (US$655 million) and Wizards of the Coast/digital gaming (US$375.6 million) segments. By comparison, entertainment was down by only 3% to US$179.2 million. 

Like most other toycos in the industry, including Jakks Pacific and Mattel, Hasbro has struggled with retailers not ordering as much inventory. But this decline was offset by growth in its licensing business. The company is expecting a strong second half of the year, as well as better results in 2024 and 2025, thanks to its relaunch of Furby and the new Magic: The Gathering set The Lord of the Rings: Tales of Middle-Earth. Cocks is also optimistic about what Tim Kilpin “has up his sleeve in terms of product innovations.” Kilpin joined the team in April as president of toy, licensing and entertainment. 

On the entertainment front, Hasbro had to absorb an impairment charge of US$25 million against Dungeons & Dragons: Honor Among Thieves (pictured), which didn’t meet box-office expectations. But growth in unscripted TV was a bright spot for the segment, along with (as usual) the company’s family brands. 

Revenue for Hasbro’s franchise brands category, which is where major IPs such as Peppa Pig, Hasbro Gaming and Transformers live, was down by 5% overall because of inventory reductions. But brand by brand, revenue for Peppa, Transformers and Dungeons & Dragons was up. Hasbro Gaming’s performance was flat, however Cocks has high expectations for the segment heading into the rest of the year. 

He is especially optimistic about the brand-new Dungeons & Dragons video game Baldur’s Gate 3, which comes out today. Developed by Belgium’s Larian Studios, the title could be a success that’s on par with a blockbuster film in terms of sales and driving engagement for the D&D brand, said Cocks. He went as far as to predict that Hasbro will make more money from Baldur’s Gate 3 than it has from its film and TV licensing business in the last five or 10 years—a number that he characterized as “not tremendous.” 

“We continue to move up and to the right on our change curve—evolving our cost savings initiatives to a continuous, and relentless, improvement model,” said Cocks.