Hasbro Passes $500M Entertainment One Baton to Lionsgate

Hasbro has officially announced the transfer of Entertainment One (eOne) to Lionsgate. The deal valued at $500 million is expected to conclude by the end of 2021. The sale comes after several weeks of increased speculation that the deal was close to being finalized. This speculation was further fueled by Deadline’s report stating that Lionsgate was leading the race to acquire the majority stakes of eOne, the studio responsible for Woman King and Yellowjackets. The news broke just hours before Hasbro’s Q2 earnings call.

In 2019, Hasbro’s initial investment in eOne amounted to $4 billion. The sale price is set at half a billion dollars, $375 million of which will be paid in cash after certain price adjustments, with the remaining amount involving Lionsgate taking on production financing loans. Both companies’ Boards of Directors have given their approval, but the deal is now subject to closing conditions and regulatory approvals. Hasbro aims to use the proceeds from the sale to pay off a minimum of $400 million of its floating-rate debt by the end of 2021.

In a statement released by Hasbro, CEO Chris Cocks declared the sale to be in full alignment with the company’s strategic approach. “Lionsgate’s management team is experienced in entertainment and adept at driving value, and we’re glad to have found such a good home for our eOne film & TV business,” he stated. Cocks also expressed Hasbro’s anticipation for future collaborations with Lionsgate, especially on the Monopoly movie adaptation.

Jon Feltheimer, Lionsgate CEO, shared his enthusiasm about the acquisition, stating that the move “checks off all the boxes in areas that play to our core strengths.” The deal includes eOne’s scripted and unscripted TV productions, global film distribution, the 6,500-plus title content library, and eOne’s Canadian film and TV business. Hasbro will retain the Family Brands division which includes familiar brands like Peppa Pig and PJ Masks.

To prepare for the sale, eOne underwent several layoffs impacting around 20% of the studio’s film and TV personnel. In January, Hasbro declared plans to reduce the company’s global workforce by 15%, which equates to roughly 1,000 positions. It was later revealed that eOne was also planning to close its theatrical operations in the U.K.

Now, for the little caramel topping on this Hollywood Sundae: In the grand theater of business, nothing, and I mean nothing, shocks the popcorn out of my hands like seeing a company sell off a $4 billion acquisition for a breezy $500 million. It's like trading a Hollywood mansion for, well, let's call it a delightful well-loved cottage.

But hey, this is the entertainment business and, as my wise Granny Prentice used to say, "C'est la vie, darling." So Hasbro's not batting so well on this particular inning, but it isn't all sour grapes. The Peppa Pig and PJ Masks transfer to the Family Brands division sure has a sweet, slightly porky ring to it considering their global popularity.

As for Lionsgate, they've hit a goldmine. John Feltheimer must be chittering away in a glee so immense, it would make the Cheshire cat look glum. And rightfully so. Acquiring a beastly content library of over 6,500 titles is like owning half the stars in Hollywood's darling sky. And of course, the cherry on top is the partnership with Hasbro on the upcoming Monopoly movie. Can I hear a “cha-ching”?

But all this hoo-ha, it makes for exciting headlines and a cracking game of Hollywood chess. So as the popcorn pops, the cameras roll, and our dearest Peppa snorts, let's just sit back and enjoy the rollicking ride this glamorous industry offers us. Let's face it, in Tinseltown, reality is often far more thrilling than the movies!