WotC ICv2 Has A Theory That WotC Will Be Sold

[billd91]

I don't know who this Scott Thorne guy is. I can't tell if he's tossing out clickbait, or if hes just seriously out of touch.

If his reference to the Toys R Us debacle in Asmodee article linked in the Hasbro/WotC one is any indication, he may just be kind of naive.

 

[Mercurius]

One thing the article doesn't mention is the idea of "selling high." I personally don't think Hasbro is actively trying to sell WotC, but if the right buyer came along, now would be a good time to sell.

 

[embee]

Not gonna happen. There's no way. WotC is making money (and lots of it), and both M:tG and D&D are growing in popularity. I doubt that they would even sell them if they were losing money, because the brand and the IP is important to them.

"Hey guys... remember how our 10% revenue loss last year was backstopped by one of our subsidiaries? Let's sell that subsidiary right now because it's evidently become something of a printing press for money and we don't want to capitalize on a once-in-a-generation market alignment or make bank off of positive brand awareness."

- Said by no one at Hasbro.

How Critical Role helped spark a Dungeons & Dragons renaissance

Five years ago, Critical Role started recording themselves playing Dungeons & Dragons. Little did they know that their home-brewed game would gain hundreds of thousands of fans and help bolster the renaissance of the 46-year-old role-playing game.

www.cnbc.com

 

[embee]

One thing the article doesn't mention is the idea of "selling high." I personally don't think Hasbro is actively trying to sell WotC, but if the right buyer came along, now would be a good time to sell.

A) Who would buy it?

B) No it wouldn't. As of the beginning of the pandemic, Hasbro projected WotC to double its 2018 revenues by 2023.

 

[Mercurius]

A) Who would buy it?

B) No it wouldn't. As of the beginning of the pandemic, Hasbro projected WotC to double its 2018 revenues by 2023.

A) No idea, which is why I don't think they're going to sell it.

B) True, unless they know something we don't - that, for instance, the projections have changed or are less certain.

 

[Umbran]

As he states, who would buy WotC? You can dethrone the 800 lb. gorilla but you can't buy the 800 lb. gorilla.

Sure you can. You just gotta be the 2000 lb. gorilla to do it.

Who would buy it? Anyone large enough looking for IP - Amazon and Disney come to mind. Hasbro's Market Capitalization is something like $12 billion. Disney, Netflix, and Amazon are all over ten times that. They could buy it, if they wanted.

However, Hasbro has never been seen to sell off IP like that, even when they cannot capitalize on it - giving profits to another company is anathema. Unless...

...let's think some really weird scenarios...

Suppose Hasbro isn't intending to sell off the company lock, stock, and barrel, but recognize that, while they own it, they are unlikely to be able to capitalize on the value of the brand. For all that it likes to make money off its brands, Hasbro's actually not terribly good at making its brands into successful media franchises - let's face it, Transformers and GI Joe moves have basically stunk, though the former at least make some money.

"If you love something, set it free.... mostly." Imagine that Hasbro spins off WotC into its own company. It keeps 51% of the stock, and puts the rest on sale to raise capital for the released WotC. With a capital infusion greater than Hasbro itself can inject, and without the entanglement of Hasbro leadership, WotC can go off and develop itself, and Hasbro reap the benefits in terms of the stock value, if any.

That seems to play against the notion it's coming up on the auction block. Also, the lawsuits (regardless of merit) are more of liabilities than any existing contractual obligations were, so they don't add value to a potential sale. Rather, the suits drive down the price.

That depends on when - if you sell while the suit is pending, it is a liability. Resolve the suit, and it becomes past business.

 

[Goliath Coins]

I read that too. Interesting points they made. However, It is hard to understand businesses sometimes. You have two great products that have already been developed, have huge fan bases, and I am sure pretty profitable. Yet, businesses flip these all the time. Crazy.

 

[embee]

Anyone large enough looking for IP - Amazon and Disney come to mind. Hasbro's Market Capitalization is something like $12 billion. Disney, Netflix, and Amazon are all over ten times that. They could buy it, if they wanted.

Disney has no desire of owning its own toy company. Hasbro makes plenty of toys under a license from Disney, showing that if Disney wanted to be in the toy-making business, it would be, as opposed to being in the brand-licensing business. Disney makes things it wants to make (media and theme parks) and licenses the rest. Such as the Disney Princess line of dolls licensed TO Hasbro FROM Disney. Mattel had a free license to make Disney Princess dolls for decades. Disney then switched the license to Hasbro in 2015, which now shares the revenue with Disney to pay for the license.

Suppose Hasbro isn't intending to sell off the company lock, stock, and barrel, but recognize that, while they own it, they are unlikely to be able to capitalize on the value of the brand.

Hasbro has been able to capitalize on WotC. As I stated, in 2019, Hasbro revenue was down 10% and would have been even lower if not for WotC, which has been performing very well. Further, the player base and brand favorability have grown over the years.

For all that it likes to make money off its brands, Hasbro's actually not terribly good at making its brands into successful media franchises - let's face it, Transformers and GI Joe moves have basically stunk, though the former at least make some money.

Hasbro does just fine with managing their IP. The Lauren Faust MLP:FiM has been a staple for a generation now. Except for Battleship, all of its movies have turned profits, with the Transformers movies being the most profitable.

Consider what Hasbro does through its subsidiaries - shepherds franchise IPs through successive generations. Monopoly, Clue, and other board games, along with MtG, Power Rangers, D&D, Transformers, and My Little Pony. Each of these are multigenerational brands that Hasbro has kept alive.

 

[Umbran]

Disney has no desire of owning its own toy company.

No. But Disney loves IP - buying companies with IP is what they do - Pixar, Lucasfilm, Marvel. Disney could easily want to put Magic: The Gathering and D&D shows on Disney+.

Hasbro has been able to capitalize on WotC. As I stated, in 2019, Hasbro revenue was down 10% and would have been even lower if not for WotC, which has been performing very well. Further, the player base and brand favorability have grown over the years.

Yes, but while a profit is nice, even more profit is better. They have not been able to fully capitalize on it - the media revenue stream from M:tG and D&D are thin.

 

[Deset Gled]

For all that it likes to make money off its brands, Hasbro's actually not terribly good at making its brands into successful media franchises - let's face it, Transformers and GI Joe moves have basically stunk, though the former at least make some money.

Kinda have to disagree with you on this point. Besides the ridiculously profitable movies, Transformers has over a dozen highly successful TV series. GI Joe had a few series as well. My Little Pony has multiple successful cartoon series and a movie that had a 10x ROI. Have you ever heard of Littlest Pet Shot, Lady Petunia, Pound Puppies, or Popples? They're all successful, multiple-season kids cartoons by Hasbro. Did you know that Hasbro now also owns the Power Rangers? And if you want to talk video games, I challenge you to find a mass produced game system that doesn't have a branded version of Monopoly.

Hasbro plays the media franchise game quite well.