After Lionsgate acquired the production company Entertainment One (eOne), Hasbro announced its plans to move to an asset-lite business model. According to CEO Chris Cocks, the company will focus on partnerships with familiar, close co-production companies.
Earlier, Hasbro announced their sale to Lionsgate for approximately $500 million, which will soon be solidified by the end of the year. Purchased for nearly $4 billion, the remaining profits will help eliminate the $400 million floating rate debt plaguing the company. According to this deal, Lionsgate will keep the TV and Film sector of the company, which includes shows like Woman King and Yellowjacket. In turn, Hasbro will maintain its hold on the Family Branch, producing Peppa Pig and PJ Masks.
Cocks believes that this move will help the company stay focused on financial stability and will help speed recovery along. According to sources, its revenue fell by 10% to $1.2 billion, and its profits were halved by $136 million. Cocks announced that with the reduced reach with eOne, the company “will have a new marquee mission to develop, finance, and produce entertainment based on the rich vault of Hasbro-owned brands.” From the anticipated Transformers One series to the upcoming Monopoly movie co-produced by Lionsgate, Cocks has confidence in their new focus on familiar properties to rebuild profits.
Lionsgate has expressed excitement for this deal ad what it could mean for its business as it expands. As they are currently separating their film and television studio from Starz, Lionsgate is looking forward to adding eOne to their ranks. According to CEO John Feltheimer, eOne plays to its core strengths and “adds a world-class library with thousands of properties” while strengthening its cinematic business in other locations.
In preparation for this sale, eOne has undergone a series of heavy layoffs for the last few months, which includes about 20% of its film and television staff. Additionally, the company has cut back on its theatrical operations in the UK. Since January, Hasbro has also laid off 15% of its global workforce to compensate for lost profits.
There is no solid news about how the strikes will affect this new business model, though there are reservations. According to a statement from Cocks, the general outlook for future entertainment is looking rather bleak.
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