Mattel, Inc. (MAT - Free Report) extended its multi-year agreement with Warner Bros. Consumer Products which licenses the rights for all the intellectual properties in Warner Bros. Entertainment’s film and television network. Warner Bros. Entertainment is an American producer of film, television and music entertainment and is a subsidiary of one of the largest media and entertainment conglomerates, Time Warner Inc. (TWX - Free Report) .
The extension of the 15-year deal grants Mattel the permission to broaden its toy offerings based on popular DC Comics characters such as Batman and Superman. Under the deal, Mattel also secured the rights to produce toys for upcoming DC Comics films, animation and television projects. This deal will enable Mattel to manufacture toys across all its core brands including Hot Wheels, Matchbox, Barbie, Mattel Games and Fisher-Price.
The deal will script a turnaround for Mattel which has been suffering from declining sales due to weakness in its famous Barbie, Hot Wheels and Matchbox brands. In fact, the toy industry, of late, has been witnessing a general decline in demand as macroeconomic uncertainty and children’s shift toward videogames and personal electronic devices for entertainment have negatively impacted profit.
However, toys related to popular movie franchisees have generally been successful. In fact, Hasbro Inc. (HAS - Free Report) outshone other toymakers due to strategic agreement with The Walt Disney Company (DIS - Free Report) related to its Star Wars, Avengers and Spiderman brands. Mattel’s extension of the agreement with Warner Bros. will place it in a position to cash in on the immense demand for superhero toys, in our view.
Mattel, currently, carries a Zacks Rank #4 (Sell).