I think I now know why Hasbro jacked up their prices, check this out...
Some interesting information was in the quarterly report made by Hasbro - here are the clips relevant to Star Wars:
Q: […] why do you think [the royalty] percentage was down from last year so much?
A: if you remember last year, […] we’d been settling some royalty audit issues we had regarding the Lucas license which went back a number of years […] so at that time we had a relatively small charge at that time of settling royalty audits at that time. We extended out rights with Lucas for two more years as well.
Q: A couple questions, first on the boy’s toys – how much of the reduction in royalties might be attributable to any kind of weakness in Star Wars?
A: Star Wars royalties were really down mostly because of a payment we made a year ago to extend our rights for two more years. We’re seeing good sell though on Star Wars, […] but overall as you can see the combination of motion picture properties, later this fall some of those properties will be beneficiaries of television support certainly the Marvel properties, Star Wars properties in the third quarter when the third season of Clone Wars kicks in […] so it’s a good combination. […] So really it’s more related to royalties paid a year ago related to the extension of our rights and cleaning up an audit.
Once again, Hasbro seems to mention how strong Star Wars is - but strangely enough doesn't really mention them until the investor Q&A - and then only really to reiterate the "small charge" paid because of the royalty audit and that they also paid to extend the contract from 2018 to the end of 2020. There was no talk of the consolidation of series and removal of lines due to the impact of sales - and only Transformers, Iron Man and G.I. Joe (though barely) were mentioned when headlining the boys toys section. This should be a very interesting indication of what's tom come from Hasbro later this year once these other franchises hit their peak and fall off like they historically have.
To listen to the full report, click the link below:
http://phx.corporate-ir.net/phoenix.zhtml?c=68329&p=irol-IRHomeNo matter how much spin they put on it the fact of the matter is they hiked the prices from their own mistakes and got caught in an audit. Another thing that was mentioned in the webcast (but was too long to mention verbatum) was that Hasbro reaches an agreement before hand about the price point and cost to them for materials used to create their products - if the cost flucuates it's dependant on the subsidiary to absorb the cost. That means that they have no excuse to raise the price because the price of plastic / oil went up. Hasbro does go on to say that the dramatic circumstances last year caused them to revise that - but they gloss over the fact that the market returned to normal by that time - so what's the deal?! Hasbro needs to get control of it's lines and how it handles them - especially if they're now going to have the line until 2020
