Exclusive: Hasbro to acquire Power Rangers, other franchises from Saban: sources

[May 01, 2018]   By Jessica Toonkel

(Reuters) - Toy maker Hasbro Inc <HAS.O> has agreed to acquire children's entertainment and merchandising franchises, including the characters of the superhero TV show Power Rangers, from Saban Entertainment for around $520 million in cash and stock, people familiar with the matter said on Tuesday.

The deal comes as Hasbro, the world's largest toy maker whose stable of franchises includes "My Little Pony," "Monopoly" and "The Transformers," seeks to reverse its losses following the bankruptcy last year of U.S. toy retailer Toys R Us.

In addition to making toys and action figures, Hasbro profits from such franchises through the production of movies and TV series, allowing it to diversify its revenue beyond retail sales.

A deal between Hasbro and Saban Entertainment, the owner of the Power Rangers franchise, could be announced as early as Tuesday, the sources said. The agreement also includes franchises such as Luna Petunia and Popples, the sources added.

The sources asked not to be identified ahead of an official announcement. Hasbro and Saban Entertainment did not immediately respond to requests for comment.

Launched as the “Mighty Morphin Power Rangers” live-action TV show in 1993, the franchise was created by Haim Saban, owner of Saban Entertainment.

The TV series gave rise to a line of action figures and other merchandise, plus three movies, including 'Saban’s Power Rangers' last year. The 2017 film, distributed by Lions Gate Entertainment Corp <LGFa.N>, sold $142 million worth of tickets worldwide.

Earlier this year, Hasbro and Saban signed a deal for the toy maker to design, produce and bring to market a wide variety of toys and role-play items inspired by Power Rangers.

Pawtucket, Rhode Island-based Hasbro has taken several steps to boost its presence in the entertainment business as a way to fuel toy sales.

People dressed like the characters of Power Rangers pose at the unveiling of the star for Israeli-American producer Haim Saban on the Hollywood Walk of Fame in Los Angeles, California U.S., March 22, 2017. REUTERS/Mario Anzuoni - RC1D8FA32480

The company operates Hasbro Studios, which produces TV shows such as the upcoming Netflix Inc series, “Stretch Armstrong and the Flex Fighters.”

The toy industry's traditional players have been undone in recent years by a shift toward thousands of rival, smaller producers selling on Amazon and other e-commerce sites, as well as kids' preference for electronic games over physical toys.

Last week, Hasbro reported a net loss attributable to the company of $112.5 million, or 90 cents per share, in the first quarter ended April 1, compared with a profit of $68.6 million, or 54 cents per share, a year earlier.

In 2014, Hasbro held merger discussions with DreamWorks Animation SKG Inc, the studio behind “Shrek,” but DreamWorks was subsequently bought by Comcast Corp.

Last year, the toymaker also held talks to acquire U.S. movie studio and entertainment company Lions Gate, but those negotiations broke down over price, sources said at the time.

Hasbro has been seeking scale, and has attempted unsuccessfully to merge with peer Mattel Inc <MAT.O> over the years, most recently in 2017. Mattel added to a sense of crisis in the toy sector by appointing its fourth chief executive in three years last week.

(Reporting By Jessica Toonkel in New York; Additional reporting by Lisa Richwine in Los Angeles and Liana B. Baker and Greg Roumeliotis in New York; Editing by Bernadette Baum)

[© 2018 Thomson Reuters. All rights reserved.]

Copyright 2018 Reuters. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.  Thompson Reuters is solely responsible for this content.