Hasbro is selling its eOne television and movie business to Lionsgate in an approximately $500 million deal, after having paid $4 billion for the company four years ago.
Hasbro said Thursday that the agreement with Lionsgate includes $375 million in cash and the assumption of production financing loans, the same day it reported a $235 million loss in the second quarter of 2023.
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The acquisition will give Lionsgate access to eOne’s library of almost 6,500 titles, including “Grey’s Anatomy,” “Yellowjackets” and “The Woman King.” Lionsgate will also receive film development rights to Hasbro’s Monopoly, based on the popular board game.
The deal allows the Santa Monica, California-based company to continue to scale its operations in the U.K. and Canada, where it has recently launched production partnerships with BBC Studios, Channel Four, the CBC, Rogers’ CityTV and Bell Media.
Hasbro purchased Entertainment One Ltd. in 2019 in an all-cash deal valued at about $4 billion. At the time, Hasbro was interested in eOne’s preschool brands, which included Peppa Pig and PJ Masks. Hasbro will still have access to Peppa Pig and PJ Masks, as it will keep ownership of the family brands division.
While Hasbro had high hopes for the deal, in November it announced that it was looking to sell the part of eOne’s television and film business not directly supporting its branded entertainment strategy.
The boards of Hasbro and Lionsgate have approved the transaction, which is targeted to close by the end of the year.
Hasbro said it will use proceeds from the deal to retire a minimum of $400 million of floating rate debt by year’s end.
Also on Thursday, Hasbro reported a second-quarter loss of $235 million, after reporting a $142 million Q2 profit in 2022.
The toymaker said it had loss of $1.69 per share compared to the net income of $1.02 per share reported one year prior.
Hasbro posted revenue of $1.21 billion, a decrease from $1.34 billion the year prior but still bear Wall Street forecasts. Six analysts surveyed by Zacks Investment Research expected $1.11 billion.
“The Hasbro team delivered a solid second quarter, with revenue ahead of our expectations, significant reduction of inventory, and meaningful progress toward our transformation and cost savings programs,” said Chris Cocks, Hasbro chief executive officer. “New products are delighting our fans around the world, including the return of Furby.
“Importantly, we announced an agreement to sell our eOne Film and TV business to Lionsgate, where it will be in good hands, and expect to close the transaction by year end,” continued Cocks. “Storytelling is part of our mission, and Hasbro will keep producing compelling entertainment that helps bring our beloved brands to life. The sale allows us to focus on our core toy and game expertise, partner with the industry’s best, and strengthen our balance sheet as we invest to drive long-term growth and return cash to shareholders.”
Segment revenue for the second quarter (proforma):
- Franchise brands revenue decreased 5% year over year to $788.4 million.
- Partner brands revenue decreased 21% year over year to $172.9 million.
- Hasbro gaming revenue decreased 7% year over year to $491.2 million.
- Portfolio brands revenue decreased 21% year over year to $107.1 million.
- TV/film/entertainment revenue declined 10% from the previous year to $141.6 million.
Michelle Chapman is a business writer for The Associated Press. PBN staff contributed to this report.
(UPDATE: More details from second quarter earnings and comment from Cocks added in 9th through 14th paragraph)
