Marvel's Chairman, Morton Handel, commented, "While Marvel will own any inventory produced for 2006, our policy of predominantly manufacturing to order should help mitigate our inventory risk. Commencing in 2007, a wide range of toy and game categories - including action figures, role play and preschool toys, board games and puzzles - will be produced by our new licensee, Hasbro. We are very excited by the business prospects we see in teaming with an industry leader."
Additional Background on Hasbro License Agreement
The combined percentage royalty and fees to be received by Marvel from Hasbro will be generally lower than those paid by Toy Biz Worldwide, but Marvel believes that Hasbro's worldwide marketing, promotion and distribution strength should enhance the Marvel brand and Marvel-branded toy sales. In conjunction with the signing of the Hasbro license agreement, Marvel will receive a non-refundable advance of $100 million. There will be no immediate revenue recognition related to the advance payment.
The license is conditioned on its clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.