Hasbro and the Star Wars License

Hasbro and the Star Wars License

24/09/2019 0 By JoeB1

Is Hasbro Building an Empire… or Replacing One?

Updated 22/02/20: Hasbro and Disney announce a license renewal – details here.

The next 12 months will see modern Star Wars collecting hit uncharted waters as Hasbro enters the final year of their current license agreement with a new deal not yet in place.

Of course, that leaves plenty of time for Hasbro and Disney to come to a new arrangement – and my personal thoughts are that this is what will happen. But given the current state of the Star Wars brand, along with what we know (or can reasonably speculate) about Hasbro’s license, I’m no longer 100% confident that the Star Wars toy line will stay with the big H.

First, the background. With full credit to Thomas (aka Funtomaz) at Jedi Temple Archives this is what we know about Hasbro’s current Star Wars license:

  • The licensing fee costs at least 20%.
  • As well as the fee Hasbro needs to pay a minimum guarantee to Lucasfilm/Disney (over the past two decades that guarantee has amounted to at least $730 million).
  • Hasbro also has to pay royalties at the rate of 20% of net sales (Hasbro’s operating margin is usually between 11-15%).
  • Lucasfilm/Disney is the owner of everything Hasbro designs and creates for Star Wars.
  • The current deal expires in late 2020.

Disney’s high fees for Star Wars are an outlier in the world of licensed merchandise – and once upon a time, the brand may have warranted it. But as Thomas’ research shows, Disney’s current deal may not be giving Hasbro the best bang for their buck:

  • In 2006 Star Wars accounted for 16% of Hasbro’s revenue; in 2018 that figure fell to less than 4%.
  • Star Wars revenue in 2018 was the lowest since at least 2004 – even unadjusted for inflation.

If the above is correct, or even in the right ballpark, then it’s easy to picture a lot of negotiation going on between Hasbro and Disney. And it’s this context that makes Hasbro’s recent acquisitions that much more interesting.

In April Hasbro took over from Bandai as the “global master toy licensee” for Power Rangers, a great statement of intent for hooking the next generation of adult toy collectors. Yet in August things went to the next level as the toymaker announced it was also taking over the master license for the Ghostbusters franchise – something that vies much more closely to the Star Wars collector demographic.

With these two licenses, Hasbro has drastically expanded on a portfolio that already gave them a significant corner on the adult collectable market. Between Power Rangers, Ghostbusters, Transformers and Marvel, the company is indisputably the biggest player in the Western toy business.

And that’s without mentioning Star Wars.

Whether Hasbro has been acquiring licenses to replace the Star Wars brand is something we’ll most likely never know unless it happens – but either way, it will have strengthened their negotiating position. And from the outside, it looks like Disney has little to fight back with.

So, if I were Hasbro what would I be hoping to get out of a new deal?

1. A lower license cost

This one is self-explanatory. Good for Hasbro and, in the unlikely event that it leads to lower prices for customers (especially those of us in the UK, Europe and the rest of the world) then even better for us!

2. Better communication

It makes sense that, for example, Crait Luke Skywalker was not in the first wave of The Last Jedi figures. But for Hasbro to not even know that version of the character existed until the film was released spoke to a huge lack of trust. That’s not how partnerships work and is something that absolutely needs to change.

3. More “toyetic” designs

I don’t necessarily mean Ewoks (although hot damn why do we not have Black Series Ewoks yet?!) but at least try to make the character, alien and ship designs more imaginative and fun. To be fair The Mandalorian and Jedi: Fallen Order look like steps in the right direction – long may it continue.

4. Let Hasbro do the selling

We already know everything that’s coming out for Triple Force Friday. It’s on sale in Canada. There are bad quality photos of everything everywhere. The stock is sitting on shop shelves in the US right now but can’t be sold. Street dates are a marketing gimmick that worked great 20 years ago, but in 2019 this secrecy-led approach just relinquishes control of the marketing narrative. And that’s before we get on to the non-existent promotion…

The above is a fan’s wish list, pure and simple, but who knows? With Hasbro gaining some negotiating leverage they could be looking at myriad ways to improve their position.

Of course, they might also be looking for the exit.

Lightning Collection White Ranger | Green Card Back

Beyond the speculation, Hasbro’s Lightning Collection line has gotten me looking at Mighty Morphin’ Power Rangers toys for the first time since I was 11. I’m hugely excited to see what they do with the Ghostbusters, especially if they make a 6” line.

I’m in it for the toys, and while I’d love to continue supporting my favourite franchise in action figure format, we’ll hardly have been hard done by over the years if that’s no longer possible.

As with everything Star Wars related at the moment, we’re set for interesting times ahead.