YOU ARE HERE: LAT HomeCollections


Disney in Pact With Mattel, Hasbro

Licensing: Firms will make toys based on studio's classic characters, film, TV and video properties.

September 21, 2000|JEAN SCHEIDNES | REUTERS

Walt Disney Co. said Wednesday that it has entered licensing agreements with the top two U.S. toy companies, No. 1 Mattel Inc. and No. 2 Hasbro Inc., to make toys based on Disney products.

The financial terms of the deals were not disclosed.

On the New York Stock Exchange on Wednesday, Disney shares dropped $1.13 to close at $37.19, Mattel's shares were unchanged at $10.56, and Hasbro slipped 19 cents to close at $11.

"The irony is that it's a win-win situation for both [toy] companies," said Merrill Lynch analyst Hayley Kissel.

Under one agreement, the Fisher-Price unit of El Segundo-based Mattel will produce toys based on classic Disney characters, including Mickey Mouse and Winnie the Pooh, in all global territories except Japan. The Fisher-Price brand is associated with infant and preschool toys.

Mattel's rival, Pawtucket, R.I.-based Hasbro, received the rights to develop and market toys associated with all upcoming Disney-branded film, television and direct-to-video properties, beginning with "Monsters Inc.," a Disney/Pixar animated film scheduled for release in fall 2001.

The license for entertainment properties had belonged to Mattel since 1996.

"Mattel was pretty vocal about its opposition to licenses it did not see giving them a good economic return," Merrill's Kissel said. "I don't think they were making a lot on the entertainment piece. It was probably a break-even business."

Mattel has a history of focusing on its strongest brands, such as Barbie and Hot Wheels. According to Kissel, Hasbro is more accustomed to gambling on the success of movies, and Disney may even reduce that volatility.

"It's safe to assume Disney will always have a family movie out and do relatively well," she said. Relative to sporadic hits such as "Star Wars" and "Jurassic Park," Kissel said, "Disney is an annuity."

Hasbro was also named the official toy and game company for Walt Disney World, Disneyland and Disneyland Paris resorts, giving it the rights to such activities as opening a toy store inside one of the resorts and supplying games and toys to Disney's hotels and cruise ships.

Los Angeles Times Articles