DTVE Data Weekly: Hasbro sells eOne to Lionsgate after rethink

Source: Omdia

Hasbro, the toy and game company, has agreed to sell most of its eOne film and TV division (including Hasbro’s interest in eOne Canada) to mini-major studio Lionsgate. The agreed price for the deal, which is expected to be completed by the end of the year, is $500m. Hasbro will retain children’s properties Peppa Pig and PJ Masks included when it acquired eOne in December 2019 for £2.9bn ($3.7bn) in cash. In November 2022, Hasbro said it was looking for buyers after deciding that the eOne assets “no longer directly support the company’s branded entertainment strategy.”

According to Hasbro’s reporting, eOne made an operating loss of $79m on sales of $957m in its first full year as part of Hasbro. The next year, the COVID-19 pandemic flared up, severely disrupting the worldwide industry. Brian Goldner, CEO of Hasbro since 2008, died shortly after stepping down for health reasons in October 2021. Under Goldner, Hasbro diversified into TV, film, and games beyond its core manufacturing business. It started to describe itself as a “global play and entertainment company” rather than a toy company. Significantly, Hasbro is now happy to describe itself as a “toy and game company” again.

IPs

Hasbro will continue developing its own IP, such as Dungeons & Dragons, GI: Joe, and NERF, and says that it is in development on more than 30 projects. In short, Hasbro wishes to exploit its own-branded IP by itself in the market, closer to rival Mattel’s approach.

Lionsgate will add a library of 6,500 titles and a range of ongoing series commissions, including The Rookie for the ABC network and Yellowjackets on Showtime. Lionsgate will also take over the rights to the unscripted show Play-Doh Squished. Trade paper Variety reported that Lionsgate is going ahead with a movie based on Hasbro’s Monopoly board game, long in development. Lionsgate is significantly larger than eOne, with revenue of $1.08bn from feature films and $1.8bn from TV in calendar 2022, compared to $838m from Hasbro’s film and TV segment.

Even without the children’s and music parts of the eOne business retained or sold off by Hasbro, the difference between the $3.7bn the toy company paid in 2019 and the $500m Lionsgate will pay this year is massive. In 2019, the launch of new streaming services by Apple, Disney, and HBO looked as though they would herald a massive increase in content commissions, making a film and TV studio a potentially attractive asset. To some extent, those expectations bore out. Still, the climate is very different in 2023, with Disney and WB Discovery cutting back their spending on new programming and even Netflix pausing production on a variety of projects.

Tim Westcott is Omdia’s Senior Principal Analyst, Digital Content & Channels and David Hancock is Omdia’s Chief Analyst, Media & Entertainment