Potential Hasbro and Mattel Merger?

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According to a report today from Bloomberg Business, Hasbro (owners of the Dungeons & Dragons and Magic: The Gathering brands) and Mattel have been in talks about a possible merger. The talks started in 2015, and were instigated by Hasbro.
The article listed the net worth and stock values of the two companies: "Mattel shares rose 1.7 percent to $32.29 at 4:26 p.m. in New York, valuing the company at about $11 billion and extending a streak that has seen the stock gain 19 percent this year. Hasbro rose 1.3 percent to $75.96 after climbing as high as $78.45, valuing the company at about $9.5 billion." Bloomberg experts say that a merger would allow for a stronger competition against Denmark's LEGO.

This isn't the first time that the two companies have talked about a merger.

The important question for tabletop gamers, should the merger go through, is how would the Wizards of the Coast​ division fare in all of this?

 

[Dougan Axehammer]

My thoughts exactly!

I shudder to think what that might look like, though...

Ummm... Barbarella? *shrugs*

 

[Cergorach]

I'm sure a Google image search for Dungeon Barbie would provide results, but none of them would be grandma friendly...

I just had to look... Agh! Curse you!

 

[Umbran]

So LEGO has a video game that makes up a tiny fraction of the video-game market.

Lego Video games have sold in excess of 100 million copies, for something like $2 billion in sales. This has only been done by a dozen or so other franchises. So, I'm not sure about that "tiny fraction" statement.

http://www.pcgamesn.com/lego-batman...games-sales-have-made-2bn-for-warner-brothers

https://en.wikipedia.org/wiki/List_of_best-selling_video_game_franchises

 

[Cergorach]

Lego Video games have sold in excess of 100 million copies, for something like $2 billion in sales. This has only been done by a dozen or so other franchises. So, I'm not sure about that "tiny fraction" statement.

That's because there have been Lego video games for almost 20 years (first one 1997) and that resulted in $2 billion in sales over almost 20 years. Last year there was almost $92 billion in sales... That is what he means by tiny fraction.

But the numbers are not exactly right, according to fortune:
http://fortune.com/2015/04/23/warner-bros-lego/

Over 140 million Lego video games have been sold worldwide in 10 years.

Your source:
http://www.pcgamesn.com/lego-batman...games-sales-have-made-2bn-for-warner-brothers
Lists only the WB Lego Games as having sold more then a 100 million and $2 billion in sales, there are a ton of other licensees over the years... It's probably across a 7 year period, something like $300 million/year, still a drop in the bucket for the whole video games market. 0.3%

But compare it to Mass Effect and it's huge, ME1/2/3 did a little over 10 million copies total across all platforms.

Lego might be doing better the Final Fantasy, Tetris and FIFA... That's saying something...

 

[LuisCarlos17f]

* Hasbro has got Kre-o created by them, and Mattell bought Mega-blocks. In Spain when I was a child we haven't got Lego yet, but Tente and Exin Castillos. And I would rather playmobil.

* The D&D version of Barbie is She-ra and the princess power. And I love Ever After High cartoon. Mattel needs a Barbie for preschool girls.

 

[Man in the Funny Hat]

My thinking on the regulatory issues with such a merger would be that they'd do an end-run around it. The deal that combines the two monsterCo's would at the same time spin off a new and separate company with all the low-profit, non-IP-valuable lines. The new merged corp would keep all the valuable IP's, media ventures, and most profitable toys. But that's just me, and since IANAL I couldn't say whether that'd actually work to get a deal approved.

On the plus side, being a low-profit line and perhaps not-very-valuable IP (given how badly anything non-RPG has done with a D&D label on it) D&D might wind up out from under the neglectful thumb of the new HazMat.

 

[Umbran]

My thinking on the regulatory issues with such a merger would be that they'd do an end-run around it. The deal that combines the two monsterCo's would at the same time spin off a new and separate company with all the low-profit, non-IP-valuable lines. The new merged corp would keep all the valuable IP's, media ventures, and most profitable toys. But that's just me, and since IANAL I couldn't say whether that'd actually work to get a deal approved.

I'm thinking, "We'll spin off all the stuff without value, so it'll be okay, really," won't pass regulatory muster. But that's just me.

D&D might wind up out from under the neglectful thumb of the new HazMat.

And you've just hit upon why it won't happen. Nobody is going to go for buying toys for toddlers from "HazMat".

 

[LuisCarlos17f]

If I am Disney/Marvel or Warner/DC I would rather about toys because Has+mat would get a great part of the market, and even with help by other companies for videogames, comics and cartoons.

If Hasbro and Mattel merge... would be playmobil the next of the list?

 

[DerekSTheRed]

The Sherman Antitrust Act of 1890 and the Clayton Act of 1914 are the relevant legislation of US antitrust laws. Despite that, the interpretation of those laws changed in the 1970s thanks to Robert Bork's book, Antitrust Paradox. Thus "causing a shift in the U.S. Supreme Court's approach to antitrust laws since the 1970s, to be focused solely on what is best for the consumer rather than the company's practices".

IMO, keeping them separate is what's best for the consumer, but we'll have to see.

 

[aramis erak]

Why not? There are so many toy companies out there that this can't really qualify as anti-trust can it?

One good thing that might come from this is more cross pollination with D&D IP. D&D monopoly for example. Dungeon Barbie might be an idea whose time has come.

The Sherman Anti-Trust Act doesn't require a true monopoly to be invoked. It merely requires a sufficiently strong near-monopoly as to be able to artificially inflate prices. Even the attempt to dictate a shared market price amongst several companies, and/or a pattern of buying one's competitors is barred. See https://www.law.cornell.edu/wex/sherman_antitrust_act for a more detailed look.

The SEC nearly blocked Wizards from buying TSR, because most of Wizards prior purchases were simply shuttered; the deal to allow it is why Wizards kept TSR as a separate subunit as long as they did, and stopped buying up the competition.