It’s a Marvel: The Walt Disney Company (DIS) Extends Hasbro, Inc. (HAS) Contract

As we saw with Marvel, Hasbro’s Star Wars relationship is also key because the first-quarter dropoff in sales would have been a lot worse had there not been Star Wars toys put into the sales channel in anticipation of the May 2013 release of Star Wars Episode 1: The Phantom Menace, which was re-released in 3-D. They’ve also got other tie-ins with the franchise scheduled for the back half of the year, including an Angry Birds Star Wars II release.

While it’s interesting that Disney would agree to extend the contract rather than bring production in-house with its own considerable marketing muscle, it seems to me Hasbro was negotiating from a position of weakness. It needs those portfolios more than The Walt Disney Company (NYSE:DIS) needs the toymaker, which has had a longtime relationship with Hasbro’s rival Mattel, Inc. (NASDAQ:MAT) and could always switch over if it wanted.

The countdown clock may have been reset again, but I’m not particularly worried. Analysts had expected Hasbro to fall apart after Disney pulled its portfolios from the toymaker, but that didn’t happen. Not only have they extended the agreement for an additional period of time, but Marvel character-based cartoons appear on Hasbro’s Hub, something Wall Street didn’t think would happen either.

Once the deadline draws near again, it is possible The Walt Disney Company (NYSE:DIS) decides to cut out the middleman after 2020, but they could also be just as pleased with how Hasbro, Inc. (NASDAQ:HAS) has handled Marvel’s characters, and while the House of Mouse might not get all the profits as it would if it brought development in-house, it avoids the costs as well and spreads the risk. Armageddon may have been avoided after all.

The article It’s a Marvel: Disney Extends Hasbro Contract originally appeared on Fool.com and is written by Rich Duprey.

Fool contributor Rich Duprey has no position in any stocks mentioned. The Motley Fool recommends Apple, Google, Hasbro, Mattel, Netflix, and Walt Disney (NYSE:DIS) and owns shares of Apple, Google, Hasbro, Netflix, and Walt Disney.

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