Hasbro Plays Monopoly
Amongst playing with all its toys, Hasbro has found time for business. In a bid for an entertainment monopoly, the classic board game behemoth has decided not to buy Park Lane for $350, but EntertainmentOne for $4 billion!
Hasbro, meet EntertainmentOne! It’s the Canadian studio behind preschool spectacle Peppa Pig, which won it the loyalty of toddlers around the world. It makes great music. It does awesome film and TV. All it needs is a budget and brief!
After watching an eOne episode of Peppa Pig, kids might break out a Hasbro board game. It’s the premier toy-maker of the world, having earned a strong bond with kids for the joy it brought to them with brand anchors Nerf, My Little Pony, and of course, Power Rangers!
Combine EntertainmentOne’s knack for making popular kids shows with Hasbro’s ability to get those shows in front of eyeballs, and you have the wombo-combo that Hasbro CEO Brian Goldner is psyched about. Heralding the $4 billion buyout of eOne, he hopes a new portfolio of entertainment “appeals to gamers, fans, and families.”
Hasbro investors are lukewarm on the deal. While the move could catapult the company’s children’s segment, it’s been funded mostly with debt. Debt is a nitro boost that will help Hasbro grow bigger and better, faster! However, if things go south and the content slate flops, that debt could run away from the toy company. Interest obligations could drag investors out to sea, all their profits going into settling loans.
Perhaps on those fears, the stock lost 3% after the announcement yesterday. Prove investors wrong, Hasbro!