One of the biggest toy industry stories of the latter half of the year broke last week, and it took four days before anybody noticed, and didn’t hit the hobby press until two days after that.
DC Comics has signed a three-year deal with Spin Master to make action figures and other toys for three years, starting in spring, 2020.
Spin Master announced this news in a press release on December 21, but since they used the term “boys action catagory” instead of “action figures” nobody noticed or knew what they were talking about until Bloomberg figured it out and broke the news on Christmas Eve, which sent Mattel’s stock on a downward spiral going into the holiday. It was bit of a ridiculous reaction when you consider that Mattel will still be making and selling DC action figures for the next year, so any earnings estimates for 2019 shouldn’t be affected at all. Mattel will still benefit from selling toys based on Aquaman, the highest-grossing film released this holiday season as well as the upcoming, kid-friendly Shazam movie. .
Specifically, Spin Master announced, “Beginning Spring 2020, Spin Master will be a new toy licensee for DC in the boy’s action category, remote control and robotic vehicles, water toys and games and puzzles.” Spin Master had previously made and sold several remote control, Tech Deck and other DC Comics-based toys (like the one seen at left), so it’s not like they didn’t already have a working relationship with DC.
What we don’t know yet is how aggressively Mattel tried to keep the DC action figure license, if at all. Mattel has retained the rights to girls toys, including DC Superhero Girls, which is a line many people thought Mattel really dropped the ball with this year, and there is one school of thought that Mattel may have let the DC action figures go for a specific reason, which I will get into later in this post. Mattel also retained the DC Comics pre-school license, which includes the very lucrative Imaginext line.
Spin Master is one of the rising stars of the toy industry, growing exponentially through recent acquistions and is managed probably better than any other toy company of that size, they will add the DC portfolio of toys to their already successful brands that include Air Hogs, Paw Patrol, Meccano, Zoomer, Hatchimals, Gund, Teck Deck and about a zillion other toys.
One area that Spin Master has been weak in has been action figures, but with Hasbro recently laying off some of the brightest talents in action figure design and line management, Spin Master could very easily assemble a top-notch team and have a great product launch in 2020. Previously Spin Master has released action figures based on Tron and The Last Airbender, and has shown that they can handle design and distribution of 6″ and 3 3/4″ figures.
This does not look great for Mattel, but like I said, we still don’t know how hard Mattel tried to retain their deal for DC action figures. My theory is that Mattel deliberately gave up the line to make a potential merger with Hasbro more likely. One of the possible regulatory hurdles to such a merger would have been that if Mattel controlled DC Comics action figures, while Hasbro controlled Marvel’s, and that the merged company would have a virtual monopoly on the superhero action figure market.
Mattel seems to be trying to slim down a bit to make a merger or acquisition possible. They seem to have cut way back on Matchbox in favor of their Hot Wheels line, and in fashion dolls, Mattel has seemingly pulled the plug on any of their own products that could eat into Barbie’s market share.
Hot Wheels and Barbie both saw their market share increase this year, and that was a much-ballyhooed point in Mattel’s third quarter reports. What was not ballyhooed even a little was that Barbie’s market share was up, but Mattel had completely killed Ever After High and Monster High, and barely shipped any new product for the DC Superhero Girls and WWE Action Dolls in 2018.
DC Superhero Girls was a billion-dollar brand its first two years in existence, and now, two years after that high mark, the only evidence that it’s still around is the fact that Mattel retained the rights to the cartoon series that’s coming to Cartoon Network next year.
The first series of WWE Action Dolls sold in decent numbers, but the second series seems to be exclusive to Amazon, who didn’t do much to promote that they had them.
It seems to me that Mattel is streamlining to make themselves more attractive and less complicated to any potential buyer. The name “Mattel” is somewhat tainted in the industry due to years of mismanagement, but Barbie and Hot Wheels are still two evergreen cash cow brands, and that seems to be what Mattel wants their defining brands to be.
There are those who disagree with that idea. An analyst at Goldman Sachs says that he expects Mattel to aggressively pursue the Marvel and Star Wars action figure licenses that Hasbro currently holds. I think he’s sort of nuts if he thinks they have a chance, but that doesn’t mean that Mattel isn’t nuts as well.
The fact is that Mattel has badly botched their DC action figure lines, killing and relaunching them every two years, regardless of whether or not they’re selling, and not bothering to distribute them to the most compatible retailers.
That might not be Mattel’s fault. Warner Brothers Consumer Products might have been pulling the strings, and this entire DC licence situation could just be that Mattel was sick of dealing with them. WBCP is infamous for calling all the shots on toy lines and related cartoon shows, and then pulling the plug on them prematurely. It’s why Cartoon Network, which is a sister company under the Warners umbrella, is reluctant to run new DC Comics-based cartoons.
Based on their handling of DC’s figures, and the success that Hasbro has had with Marvel of late, I don’t see even a remote chance that Mattel could get Star Wars or Marvel. Hasbro’s Star Wars toys are in a major slump, but it’s a slump that corresponds directly to the performance of the recent movies. I don’t think Hasbro will be blamed for that.
Mattel is going gangbusters with WWE action figures (seen left), which are currently the best-selling action figure line in the country, and holding that license may make them more attractive to a potential buyer as well.
And keep in mind that the theory that Mattel is trying to position themselves for a merger or acquisition is just my guess at the moment.
This could just be a case of Spin Master outbidding Mattel for the DC action figure license.
For the collector, this is the “interesting times” of the famous Chinese curse. Will Mattel release all of their previously-announced product before their deal ends? Will Spin Master hire new designers who know how to create great figures? Will Spin Master make their figures compatible with the old Mattel figures, or will they make them in all-new sizes?
We have no way of knowing until it actually happens. Looks like 2020 might be a good year for PopCult to return to The International Toy Fair in New York City. This is, as they say, “a developing story.”