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Four years after purchasing Entertainment One (eOne) for $4 billion, toy manufacturer Hasbro is selling the company’s film and tv business to Lionsgate for $500 million, but will retain control of a number of its biggest IPs.

Background: Last November, Hasbro first announced its plans to sell assets from eOne. At the time, the company explained that the sale would include some parts of the studio’s TV and film operations, but not all.

What is Hasbro holding onto? Hasbro will maintain control of many of its family IPs including Peppa Pig, Transformers, Dungeons & Dragons, My Little Pony, and more. That was always the company’s plan, and according to Hasbro those brands have been rolled into the company’s licensing and merchandising plans and will be subject to increased exploitation across film, TV, animation, and digital. According to a release, more than 30 Hasbro-based projects are currently in development.

So what did Lionsgate buy? The sale does include nearly 6,500 titles; active productions for non-Hasbro-owned IPs like The Rookie, Yellowjackets, and Naked and Afraid; and eOne’s unscripted business including rights for Hasbro-based shows like Play-Doh Squished. Also included in the deal is Hasbro’s interest in the Canadian film and tv operations of Entertainment One Canada Limited.

What are the terms of the deal? Payment will include $375 million in cash, subject to certain purchase price adjustments, and the assumption by Lionsgate of production financing loans. Both companies’ boards of directors have approved the transaction, which remains subject to closing conditions, including the receipt of regulatory approvals. Hasbro has said it will use the proceeds to retire a minimum of $400 million of floating-rate debt by the end of the year and for other general corporate purposes. The sale is expected to close by the end of the year.

Why is Hasbro selling? Hasbro’s decision to sell eOne came after a strategic review and, according to the company, represents “a significant milestone in Hasbro’s commitment to executing its Blueprint 2.0 strategy, which at its core is about significantly increasing investment in Hasbro’s priority brands.” The family brands which Hasbro is holding on to are a major part of that strategy, hence their exclusion from the sale.

What are they saying? In a release, Hasbro CEO Chris Cocks said:

Entertainment remains a priority for Hasbro. Hasbro will continue to develop and produce entertainment based on the rich vault of Hasbro-owned brands. We will also bring to life new original ideas designed to fuel all areas of Hasbro’s blueprint including toys, publishing, gaming, licensed consumer products, and location-based entertainment. As part of the sale, we expect to move to an asset-lite model for future live-action entertainment, relying on licensing and partnerships with select co-productions.

Jamie Lang

Jamie Lang is the Editor-in-Chief of Cartoon Brew.