Hasbro Investor Statements and the State of MLP in 2023 · 7:37pm May 29th, 2023
Hey Poners and Ponefriends,
Lately I’ve become more and more interested in the business side of Hasbro and their quarterly investor’s calls. With my own personal business experience, and the countless related or marketing-adjacent calls I’ve been in with my own line of work, I was able to make heads or tails, and my own interpretations of these calls. I’m going to start posting about them here as I come across them, complete with my own notes and interpretations. I encourage a civil discourse in the comments!
Today’s call is from The May 22 Investors conference at the J.P. Morgan global technology media and communications conference. Link to the full recording below.
Hasbro’s Q1 Earnings Call
https://investor.hasbro.com/static-files/4e470766-a944-46ad-b317-d20a66a44d94
What’s unique about the JP Morgan tech conference over your typical earnings calls is the extensive comments from Hasbro CEO Chris Cocks. In April’s Q1Earnings call, as is typical for an earnings call, a lot of statements come pre-prepared from specific key executives and don’t expand much beyond expectations and predictions of earnings.
However in this call, we see specific statements about the future of Hasbro and it’s long-burderend entertainment division. In particular, there are a few key quotes from Chris Cocks in this call I’d like to highlight, and what they mean for the future of My Little Pony.
“Emphasizing play is where the strategic advantage of the company is. Doesn’t mean entertainment won’t be a part of our story going forward, it’ll just be a right size portion of how we think about our cash and investing.”
This is an important part of Hasbro and CEO Chris Cocks’ statement in this conference. We see him reiterate the ‘importance of play’ several times over, including a very curious and specific call out to his predecessor.
Says Chris: “Hasbro is into Play and Entertainment. The difference between Brian (previous CEO) and I is that Brian was more into Entertainment and I’m more into Play.”
What does this mean? It means Hasbro is, and has been pulling away from their TV & Entertainment division. If you check out the slides from Q1 2023’s investors call you’ll notice the same trend Hasbro has been seeing since 2020: their TV and Film division is doing poorly. Not just MLP, not just in core Ip, but across the board. This is especially important when you consider the “Streaming Boom” that resulted from people staying at home in the midst of 2020. Hasbro did not capitalize on this important time for media content, and in fact lost revenue in 2020 in the entertainment sector.
“Today we have three business parts: there’s entertainment, toys and games, then digital gaming. We are in the sales process of a big part of the entertainment division, particularly the film and Tv division on non hasbro oriented IP.” (He used reality Tv as an example). He goes on to say that they (Hasbro) spent $600-$700 mil a year on content investment. They hope what will be the result is a much smaller overall entertainment footprint: Chris says, “call it roughly 10%” of the overall current amount going towards Hasbro protected IP. He reiterates the importance of play and merchandise lines.
You’ll notice in this section the CEO is making specific mention of cutting back on costs. They want to sell Non-Hasbro Ip they own (MLP is not included). He specifically draws a budget around previous year content investment.
In the beginning of the call Chris Cocks specifically brought to attention that in March of 2022 Hasbro preformed a strategic business review: this is all about cost cutting. What’s costing us money? Where does revenue come from? If we cut x budget how does it negatively affect the revenue performance of Y? These are the questions they’re asking, and it’s important to note that they have to ask these questions. Remember, with poor performance in a core business area like their entertainment business, investors need results. They want blood. That’s what these calls are all about.
At this point in the call they speak extensively about Wizards of the Coast and their growing tabletop market, which I won’t bore you the details of save for heavy allusions toward a mobile game (if that’s something you’re interested in, I encourage you to listen to the call).
So what does the call mean? What does Chris Cocks statements imply about the future of My Little Pony? Well a number of things, to start. The below is hypothesis, conjecture, and my own personal opinion.
First and foremost, it’s important to understand that when a project is already greenlit and well under production, it’s unlikely to be pulled in this circumstance without significant investment loss. Money has already changed hands and it’s unlikely Hasbro would risk losing the investment on current-production episodes. That is to say, the episodes of G5 that have already been announced are very likely still coming. We should have enough Pony to reasonably last us the next two-three years.
Beyond that is where things get murky. If I were to hazard a guess, it would be that G5 may be the last and final My Little Pony TV-iteration for some time. It’s hardly been the saving grace of the film and TV division, and Hasbro CEO Chris Cocks is transparent about his lack of vision for the Entertainment Division of Hasbro. I would predict, on reasonable grounds, the phasing out of TV-based Pony lines and a future in pure merchandising lines a la G2.
This is not to say that the current CEO of Hasbro, who was welcomed into the role by my estimate of January 2022, is a bad CEO or making unwise decisions. The fact, is, Hasbro is a big company with many moving parts and different IP’s, not just MLP, and it isn’t doing well. This CEO, from everything I can tell, is what you would call a cost-cutting CEO: they speak of things like operational excellence and cutting operation costs, selling off non-essential IP’s and divisions, and refocusing on their core revenue stream: that is to say, focusing on what they KNOW works.
It’s really going to be up to the next CEO to decide the fate of MLP, and what’s going to happen.
What are your thoughts? Anything I missed? What do you think of the CEO? Share below?
Huh… after reading this maybe that rumor could very well happen… That’s unfortunate that Hasbro shows just haven’t done well since 2020 which really we had covid and other worldly issues since then though seeing how G5 has been handled and the fandom’s mix response about the show before we all liked Chapter 4. I definitely see MLP shows being on break like with what happened between Tales and G3…
Did they really imply there is more episodes coming that weren’t announced? I wonder if that Short they did about TYT implies we won’t see much episodes till August… I am sad that G5 might be short and probably makes sense story wise if Opaline is the only villain and we don’t get a new villain.
I wasn’t aware which CEO is running and what’s happening there. Thank you for making this amazing post and showing the work because it helps a lot understanding what’s happening.
Do you think we will not see much Hasbro TV content anymore in the future? Besides Transformers probably