Hasbro picks up the Marvel License

Rumors of Hasbro picking up the Marvel license hit the net over the weekend, today it was confirmed by both Hasbro and Marvel. This is huge news for Marvel fans and it has created more questions then it has answered, the New York Toy Fair is just a few weeks away and we will be sure to follow up with both Toy Biz and Hasbro during our coverage.

Hasbro announced today that Marvel has granted them the toy and game rights to its renowned Super Hero universe that includes franchises such as Spider-Man, Fantastic Four, X-Men and Captain America.

Through the agreement, Hasbro has obtained the rights to develop products based on Marvel’s globally-known universe of over 5,000 characters in a wide range of toy and game categories -- including action figures, role play and preschool toys, board games and puzzles. The agreement covers both the “classic” comic book look of the characters as well as product lines inspired by Marvel-themed movies.

The five-year license gives Hasbro the rights to bring Marvel Entertainment-based toy products to retail beginning January 1, 2007. Hasbro’s first full line of products based on Marvel properties is expected to center on Ghost Rider and the highly-anticipated movie event, Spider-Man 3, scheduled for release on May 4, 2007. Marvel has also agreed to provide services to Hasbro in connection with the licensed toys.

Along with Hasbro, Marvel Entertainment also announced via a press release today that is has terminated its licensing agreement with Toy Biz Worldwide Ltd., effective as of December 31, 2005, one year earlier than the license's scheduled termination date. As a result of the termination, in 2006 Marvel-branded action figures and other toys formerly produced by Toy Biz Worldwide will be produced by Marvel.

This will put Marvel in a better position to effect a smooth transition to Hasbro in areas such as toy development, manufacturing, shipping, and retail space. As a result of this early termination, Marvel will record a one-time cash charge of $13 million - $16 million in the fourth quarter of 2005 related to the early termination and reimbursed research and development expenses. The charge is not reflected in Marvel's financial guidance for 2005, last provided on November 9, 2005.

The new license guarantees Marvel $205 million in royalty and service fee payments, of which $70 million would be payable on the theatrical release of Spider-Man 3 and $35 million upon the theatrical release of Spider-Man 4. In addition, the license can be extended past the five year term, dependent on the number of other entertainment properties released during that timeframe.

Marvel's Chairman, Morton Handel, commented, "While Marvel will own any inventory produced for 2006, our policy of predominantly manufacturing to order should help mitigate our inventory risk. Commencing in 2007, a wide range of toy and game categories - including action figures, role play and preschool toys, board games and puzzles - will be produced by our new licensee, Hasbro. We are very excited by the business prospects we see in teaming with an industry leader."

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