Hasbro, Inc. 10-K (2022-02-23)

For the fiscal year ended December 26, 2021

 

 

Business

 

Overview

 

Hasbro, Inc. (“Hasbro”) is a global play and entertainment company committed to Creating the World’s Best Play and Entertainment Experiences and its purpose of making the world a better place for all children, fans and families.

 

 

 

Hasbro delivers immersive brand experiences for global audiences through consumer products, including toys and games; entertainment through Entertainment One (“eOne,”), our independent studio; and gaming, led by the team at Wizards of the Coast, an award-winning developer of tabletop and digital games. With our eOne studio and Wizards gaming business, we continue to expand our global audiences beyond children, fans and families, through content and gaming.

 

immersive : (of a game, performance, work of art, etc.) that seems to surround the player or viewer so they feel totally involved in the experience, often by using three-dimensional computer images 

 

 

 

Our iconic brands include NERF, MAGIC: THE GATHERING, MY LITTLE PONY, TRANSFORMERS, PLAY-DOH, MONOPOLY, BABY ALIVE, DUNGEONS & DRAGONS, POWER RANGERS, PEPPA PIG and PJ MASKS, as well as premier partner brands.

 

 

 

For the past decade, we have been consistently recognized for our corporate citizenship, including being named one of the 100 Best Corporate Citizens by 3BL Media and one of the World’s Most Ethical Companies by Ethisphere Institute.

 

 

 

 

(omitted)

 

 

 

Brand Blueprint Strategy

 

Our strategic plan is centered around the Hasbro Brand Blueprint, a framework for bringing compelling and expansive brand experiences to consumers and audiences around the world. Our brands are story-led and play-led consumer franchises brought to life through a wide array of consumer products, digital gaming and compelling content offered across a multitude of platforms and media.

 

blueprint : a photographic print of a plan for a building or a machine, with white lines on a blue background / a plan which shows what can be achieved and how it can be achieved 

 

compelling : that makes you pay attention to it because it is so interesting and exciting

 

multitude : an extremely large number of things or people / the mass of ordinary people / a large crowd of people

 

 

 

Our commitment to disciplined, strategic investments across the Brand Blueprint over the long-term has built a differentiated business with diversified capabilities to drive profitable growth and enhance shareholder value.

 

 

 

 

 

Hasbro's purpose of making the world a better place for all children, fans and families sits at the center of the Hasbro Brand Blueprint and is a key driver of our brands and content.

 

 

 

The development and execution of our brands and content are informed by our proprietary consumer insights, which help us understand the behavior of our consumers. We have learned that consumers will travel with a brand that they love across multiple forms and formats, including our core historical strength of toys and games and licensed consumer products, as well as digital gaming and story-led entertainment, such as short-form content online and long-form content in television and film.

 

proprietary : (of goods) made and sold by a particular company and protected by a registered trademark / relating to an owner or to the fact of owning something 

 

 

 

The value of Hasbro is fully activated when we can take a brand across all elements of the Brand Blueprint – consumer products; Wizards of the Coast and digital gaming; and entertainment. The ability to build a brand in any of our segments and leverage in-house capabilities to create multiple categories of engagement with consumers and fans is unique to Hasbro and optimizes our economics today and in the future.

 

optimize : to make something as good as it can be; to use something in the best possible way

 

 

 

As the global consumer landscape, shopping behaviors and the retail and entertainment environments continue to evolve, we continue to adapt and refine our business strategy. This process includes reexamining the ways we organize across the Hasbro Brand Blueprint, re-shaping our business into a more adaptive and digitally-driven organization, expanding our ecommerce capabilities, including building direct to consumer expertise, and attracting and developing a high-performing and diverse workforce through human capital investments.

 

refine : to make a substance pure by taking other substances out of it /  to improve something by making small changes to it

 

re-examine : to examine or think about something again, especially because you may need to change your opinion

 

human capital : the skills, knowledge and experience of a person or group of people, seen as something valuable that an organization or country can make use of

 

 

 

Below is summary of the key areas of focus for activating our brands across the Hasbro Brand Blueprint.

 

Toys and Games. We market and sell toys and games based on our owned and controlled brands globally at retail stores, through e-commerce platforms and through our fan-based direct-to-consumer platform, Hasbro PULSE. Additionally, through license agreements with third parties, we develop and sell products based on popular third-party brands through these channels.

 

direct-to-consumer : used to describe the advertising and selling of medicines to the people who use them, rather than to doctors

 

 

 

Our toys and games include action figures, arts and crafts and creative play products, fashion and other dolls, play sets, preschool toys, plush products, sports action blasters and accessories, vehicles and toy-related specialty products, games and many other consumer products which represent an array of internationally recognizable brands that capture the imagination of our consumers worldwide.

 

 

 

Within toys and games, as a leading producer of new and innovative gaming brands and play experiences our gaming business continues to transform game play. To successfully execute our gaming strategy, we consider brands which capitalize on existing trends while evolving our approach to gaming using consumer insights and offering gaming experiences relevant to consumer demand for face-to-face, trading card and digital game experiences played as board, off-the-board, digital, card, electronic, trading card and role-playing games.

 

relevant : connected with what is happening or being discussed

 

 

 

Our subsidiary, Wizards of the Coast (“Wizards”), is a critical part of our gaming business, driving innovation and growth through its popular role-playing and fantasy card-collecting games such as MAGIC: THE GATHERING and DUNGEONS & DRAGONS.

 

subsidiary : connected with something but less important than it / (of a business company) owned or controlled by another company 

 

 

 

Our iconic game brands include long-time favorites such as MONOPOLY, JENGA, CONNECT 4, THE GAME OF LIFE, SCRABBLE, CLUE and TRIVIAL PURSUIT. Our gaming business also includes new social gaming brands as well as many other well-known game brands.

 

 

 

Licensed Consumer Products. We promote our brands through the out-licensing of our intellectual properties to third parties for promotional and merchandising uses in a wide range of consumer products.

 

 

 

These include apparel, publishing, home goods and electronics, or in certain situations, toy products where we consider the out-licensing of brands to be more effective and profitable than developing and marketing the products ourselves.

 

 

 

We also out-license our brands for uses in theme park attractions, other forms of location-based entertainment and within formats such as film and TV programming. In cases where we license our intellectual property to a third party, we enter into contracts with licensees that pay us either a sales-based or usage-based royalty, or a combination of both, for use of the brands, and, in some cases, the license arrangements are subject to minimum guaranteed amounts or fixed fees, over the term of the license.

 

 

 

Digital Gaming. We are investing to grow our digital gaming business to further unlock the value of our brands through play and storytelling.

 

 

 

This includes development of digital games internally and through third parties. For example, we have developed and launched digital versions of the MAGIC: THE GATHERING card game, including Magic: The Gathering Arena, which includes the game's mobile application launch in 2021.

 

 

 

Additionally, through Wizards we launched Dungeons & Dragons: Dark Alliance, a team-based action role-playing game, set in the DUNGEONS & DRAGONS world, released in the first half of 2021 for PC and gaming consoles.

 

 

 

We also out-license certain of our brands to other third-party digital game developers who transform Hasbro brand-based characters and other intellectual properties, into digital gaming experiences.

 

 

 

Entertainment. A key driver of the Hasbro Brand Blueprint is to reinforce storylines associated with our brands through several entertainment mediums, including television, film, digital content and other programming.

 

 

 

Our entertainment business, through eOne, is a global independent studio, that specializes in the development, acquisition, production, distribution and sales of entertainment content.

 

 

 

With our cross-platform capabilities our entertainment business leverages film and television production and sales, digital content and children's programming to create compelling entertainment and drive creativity across brands with merchandising and licensing tie-ins.

 

cross-platform : able to be used with different types of computer systems

 

leverage : to get as much advantage or profit as possible from something that you have

 

 

 

Television. In television, we are a major independent producer of television content with a focus on the development, production and acquisition of high-quality television programming for sale to broadcasters and digital platforms globally.

 

 

 

Through our television studios, we develop and produce original programming for broadcast in our core television production territories of Canada and the U.S., which is then distributed into global markets to various broadcasters and cable networks by our international sales network.

 

 

 

We also distribute programming globally on various digital platforms, including Netflix and Apple TV. Our television programming is typically financed on a production‑by‑production basis by way of production financing facilities.

 

 

 

Our original television programming is sold to broadcasters on a series‑by‑series or individual show basis for broadcast on free television, pay television, Subscription Video‑On‑Demand ("SVOD") and other digital platforms. Our programming spans a variety of genres, including scripted drama, non‑scripted reality and documentaries, and in multiple formats, including series, television films, mini‑series and specials.

 

span : to last all through a period of time or to cover the whole of it

 

 

 

Film. In film, our focus is on the development, production and co-production of films, an increasing number of which are based on Hasbro brands, as well as the acquisition and development of film production rights and the exploitation of these rights on a multi‑territory basis across all media channels, including cinema, physical home entertainment and broadcast and digital.

 

 

 

In October 2017, we entered into an agreement with Paramount Pictures (“Paramount”) to produce and distribute live action and animated films, as well as television programming based on Hasbro brands over a five-year period.

 

 

 

Hasbro’s global eOne studio plays an active role alongside Paramount in content development and production under this relationship. Hasbro also plays a significant role in financing films created through this cooperative agreement. Under this relationship we plan to release TRANSFORMERS: RISE OF THE BEASTS, a feature length film expected in summer of 2023.

 

alongside : next to or at the side of somebody/something

 

 

 

In addition, under a separate agreement entered with Paramount, where Hasbro’s eOne studio will serve as the production entity, we plan to release a DUNGEONS & DRAGONS feature length film, expected in early 2023.

 

 

 

Family Brands Animation. Our family brands team develops, produces and distributes animation content for children’s properties on a worldwide basis.

 

 

 

The principal brands include MY LITTLE PONY, PEPPA PIG and PJ MASKS, whose content entertains children worldwide and generates revenues around the Hasbro Brand Blueprint through licensing and merchandising programs across multiple retail categories.

 

 

 

These brands generate revenues from Advertising Video-On-Demand (“AVOD”) through platforms such as YouTube and SVOD revenues from the sale of content to video streaming platforms. Our portfolio of preschool brand driven content also includes PJ MASKS, CUPCAKE & DINO: GENERAL SERVICES, and RICKY ZOOM, as well as BABY ALIVE and PLAY-DOH.

 

preschool : a school for children between the ages of about two and five

 

 

 

(the rest omitted)