Mattel Convinces Disney It Will Love The Princesses Better Than Hasbro

When Disney awards the toy licensing rights for its most prized properties, “show me the love” can be as important as “show me the money.”

Mattel today announced that it has won back the licensing rights for the Disney Princesses and Frozen properties, after losing those rights, and Disney’s love, in an embarrassing breakup seven years ago.

In 2014, the princess properties left then-struggling Mattel for the toy manufacturer’s top rival Hasbro, in a move that hurt Mattel’s psyche almost as much as its bottom line. Hasbro released its first toys related to the license in 2016.

Mattel executives told the Wall Street Journal that losing the princess franchise was a “wake up call” for the floundering Mattel, and that ever since they have vowed to win the princesses back.

But licensing love affairs never last forever. Top properties go where they feel the most love, because they believe that translates into marketing and merchandising attention, and more money.

Mattel investors showed they loved the news, driving Mattel’s stock up more than 10% in the hours after the trade was announced. Hasbro’s stock was down slightly more than 1% during the same period. But Hasbro’s stock trades at more than four times the value of Mattel’s, at $95.58 to Mattel’s $19.61 at the previous day’s close.

The switch could be the rare licensing turnover that is good for both companies, Jim Silver, CEO of toy review site TTPM, said.

The princess line of toys, when they originally came out, performed very well for Mattel, with its doll expertise, but for Hasbro the franchise wasn’t a financial win. “I don’t think this came as a surprise for Hasbro,” Silver said.

MORE FOR YOU

Hasbro winning the princess and Frozen licensing rights in 2014 was a major coup for Hasbro, and slap in the face for Mattel. Hasbro won those rights as Frozen, the 2013 hit animated release, was a red-hot licensing property, with the Frozen toy-buying frenzy showing no signs of slowing down.

But those sales did cool off, and Hasbro, which made its deal at the peak of Frozen fever, possibly faced tougher terms than Mattel will. “I don’t think it was a profit center for Hasbro,” Silver said.

The princess deal is another example of “the flip-flopping that happens between toy companies and licenses,” James Zahn, deputy editor of The Toy Book, said.

“The reality here is that Hasbro is just not a player in the fashion doll category and the Disney Princess license gave them a point of re-entry into that category,” Zahn said. The return of the princess license to Mattel is a testament to the improvements Mattel has made recently, he said.

Both Zahn and Silver noted that Disney is still showing love for Hasbro by extending its licensing agreement for Star Wars and other Disney Lucasfilms properties.

Hasbro’s “relationship with Disney is still super strong,” Silver said.

“Disney wants to play ball with all the major players” in toys, Silver said. “Disney wants to deal with Mattel, they want to deal with Hasbro, they want to deal with Lego, and all the major companies because they want the competition. The competition is good for business, for making companies strive to make better product and drive higher sales,” he said.

Disney decided to pull Mattel’s license to make Cinderella, Snow White, and the newer members of its Princess lineup soon after Mattel launched its own toy line of Ever After High dolls, based on a modern interpretation of fairy tale characters like Cinderella and Sleeping Beauty.

Disney definitely did not want Mattel sharing the love with a new line of competiting princess dolls.

At Hasbro, Disney may have been feeling a big neglected of late as Hasbro has been transforming itself into an entertainment company first and toy manufacturer second, with an emphasis on developing its own entertainment properties and merchandising around them.

Hasbro, through its acquisition of the Entertainment one (eOne) studio, owns the Peppa Pig and PJ Masks animated shows, and has made toys related to those shows its star performers. In recent company presentations, Hasbro executives have shown Peppa Pig a lot more love than Cinderella, Frozen’s Elsa, or any of the other Disney Princesses. And a Disney Princess never wants to feel like she is second fiddle to a cartoon pig.