This presentation explores the strategy of Hasbro putting its brands on the big screen. We will cover the company's history, past strategies, and the terms of the deal.

1. Marco Boasso
Ryan Huelsmann
Tim Stewart

2.  Company Background
 Management
 Competitors
 Financial Highlights
 Alternatives
 Decision Making
 How Hasbro Entered the Movies
 Hasbro’s Role
 Results

3.  Founded in Providence Rhode Island in 1923
 Hassenfeld brothers – Polish immigrants
 Company first operated as textile remnant
business
 Started making school supplies
 “Transformed” into making toys from 1930s to
1960
 1952 Mr. Potato Head (first toy to advertise on TV)
 1964 G.I. Joe – in 2 years it accounted for 2/3 of
company sales - $40 million

4.  1968 went public
 1975 discontinued G.I. Joe
 Company in poor financial situation by 1979
 1982 G.I. Joe returned
 1984 Transformers toy line is launched as well as
cartoon
 1980s and 1990s major acquisitions took place
▪ GLENCO – infant products
▪ Knickerbocker Toy Company – Raggedy Ann and Andy
dolls

5. ▪ Milton Bradley – 1984
▪ Coleco Industries – Cabbage Patch Dolls
▪ Tonka Corporation and Tonka’s Parker Brothers unit, the
maker of Monopoly
▪ Kenner Products – Batman figures and Strawberry
Shortcake doll
▪ 1991 - Established operations in Greece, Hungary,
Mexico
▪ Nomura Toys – Japanese toymaker

6.  1995 Mattel approached Hasbro for merger
▪ Hasbro board turned it down due to fear of antitrust
issues
 1997 Hasbro purchased license for Star Wars
$600 Million and gave 7.4% stake of company
 Steep losses from drop offs in Star Wars toys
and Pokemon cards in late 20th century and early
21st
 21st Century - Company started refocusing on
traditional toy lines – G.I. Joe, Monopoly, Mr.
Potato Head

7.  Alfred J. Verrecchia
▪ President and CEO
▪ COO from 2001 to 2003
 Brian Goldner
▪ Chief Operating Officer
▪ Executive Producer of the first
Transformer movie
▪ Chief Architect of brand drive movies
 David D.R. Hargreaves
▪ Chief Financial Officer

8.  Mattel
▪ Barbie
▪ Hot Wheels
▪ Fisher Price
▪ American Girl
 JAKKS Pacific
▪ Club Penguin
▪ Hello Kitty

9. HASBRO (In thousands)
2000 2001 2002 2003 2004 2005
Net Rev $3,787,215 $2,856,339 $2,816,230 $3,138,657 $2,997,510 $3,087,627
OpProfit ($104,277) $211,330 $219,291 $344,616 $293,012 $310,521
Margin (.2%) 7.4% 7.8% 11% 9.8% 10.1%
MATTEL (In millions)
2000 2001 2002 2003 2004 2005
Net Rev $4,565.5 $4,687.9 $4885.3 $4,969.1 $5,102.8 $5,179.0
Op Profit $370.6 $579.3 $733.6 $785.7 $730.8 $664.5
Margin 8.1% 12.4% 15% 15.8% 14.3% 12.8%

10.  Hasbro has a history of
purchasing companies
and their brands
 Milton Bradley (1984)
 Tonka Corporation with
Parker Brothers and
Kenner Brothers (1991)
 Wizards of The Coast
(1999)

11.  Pros
 More product brands for
a diversified brand
portfolio
 Expand their limitations
with Hasbro’s
capital/knowledge
 Cons
 Costly
 Underperforming
brands

12.  Entering into Licensing
agreements
 LucasFilms’s Star Wars
 Marvel’s Avengers
 Sesame Street Workshop

13.  Pros  Cons
 Have access to  The shows/movies may
successful brands not be successful thus
 Focus on creating the product lines will
toys/games instead of falter as result
creating new brands and  Product line can still
brand identities falter despite success of
 Cost effective brand. Remember Lego
and Harry Potter
 Limited supply of brands
available to be licensed

14.  In the 80’s, Hasbro had two animated
series and comic books showcasing :
G.I. Joe A Real American Hero
(1984) and Transformers (1984)
 In addition, spinoffs of these series
were created during the 90’s & early
00’s showcase on various television
networks, animated movies and
comic books. TRANSFORMERS 80'S THEME
 On 10/10/10, the Hub was launched.
A joint venture between Hasbro and
Discovery Communications to
launch more programs
showcasing its various
brands.

15.  Pros  Cons
 Successful strategy that  Limited control over
worked in the past networks such as time slots
 Variety of animation styles  Show could get cancelled
 Best example would be product line will not
Transformers spinoff succeed. G.I. Joe Sigma Six
Transformers: lasted 14 episodes.
Beast Wars  Lots of competition
(96-99) against other networks TV
programming

16.  Building off the brands’
successes from the past, Hasbro
now enters the realm of
featured films to extend these
brands to new heights Transformers Trailer
 Aligning with certain studios
that will respect the brands such
as Paramount/DreamWorks
and directors that can deliver
such as Steven Spielberg or
Michael Bay

17.  Pros  Cons
 Expanding market share  Cost
 New technology in movies  New area for Hasbro by
vs. the anime from the 80’s going into this venture
 Revive/create new product  Not finding the right
lines creative talent who will
 Semi-familiar with the respect the brand or
entertainment industry deliver an exciting movie
through TV programs  Die hard fans disappointed
 Don’t have to worry about or upset with the movie
networks competing
against TV programs

18.  Brian Goldner Joins
Hasbro in 2000
 Success of Spider Man
movie reinforces idea of
brand name could
resonate as a motion price
 Goldner vision “re-invent,
re-ignite, and re-imagine
core brands to create new
experiences for consumer

19.  Studios rejects Hasbro Transformers concept
 In 2003, Goldner contacts Bonaventura of
Paramount Pictures about using GI Joe brand
 Producers Don Murphy and Tony DeSanto
optioned the film rights and began writing a
Treatment for Transformers
 Steven Spielberg signs on as Executive
Producer
 DreamWorks Studios sold to Paramount’s
Parent company Viacom

20.  Spielberg recruits
Michael Bay as director
 Bay travels to RI and
meets with Goldner to
learn:
▪ What Transformer brand is
about
▪ Stories that had to be told
▪ Family tree of characters
and how they relate with
each other

21.  Movie released and becomes blockbuster hit
during summer of 2007
 Grosses more than $700 million worldwide
 Spurned 2 sequels that debuted in 2009 and
2011
 Laid the groundwork for other Hasbro brands
to enter the big screen
 Re-sparked the brand on a massive scale that
other brands like Kre-O work solely adjunct
to the Transformers brand

22. Movie Domestic Foreign Gross Total Opening Awards
Gross ($) ($) Worldwide Weekend ($)
Gross ($)
Transformers 319,246,193 390,463,587 709,709,780 70,502,384 Nominate
(2007) with #1 in for 3
4,011 theaters Oscars
Transformers: 402,111,870 434,191,823 836,303,693 108,966,307 Nominate
Revenge of the with #1 in for 1
Fallen (2009) 4,234 theaters Oscar
G.I. Joe Rise of 150,200,000 151,800,000 302,000,000 54,700,000 None
Cobra (2010)
Transformers: 352,390,543 770,805,646 1,123,196,189 97,852,865 N/A
Dark of the with #1 in
Moon (2011) 4,088 theaters

23.  GI Joe 2 Retaliation  Risk
 Battleship  Stretch Armstrong
 Ouija  Candyland
 Monopoly  Micronauts
 Clue

24.  No money from box office revenue
 Revenues from movie tied to product sales:
 Transformer toy sales for 2007: $470 Million
 up from $30 million when Goldner joined in 2000

25. 2006 2007 2008 2009 2010
Net Revenues $3,151,480 $3,837,557 $4,021,520 $4,067,947 $4,002,161
Operating $376,363 $519,350 $494,296 $588,598 $587,859
Profit
Operating 11.9% 13.5% 12.3% 14.5% 14.7%
Profit Margin
Net Earnings $230,055 $333,003 $306,766 $374,930 $397,752
EPS (Diluted) $1.29 $1.97 $2.00 $2.48 $2.74
Cash & Cash $715,400 $774,458 $630,390 $636,045 $727,796
Equivalents
Long-term $494, 917 $845,071 $709,723 $1,131,998 $1,397,681
Debt (current
portions)