Entertainment One, the entertainment company that has agreed to be acquired by toy giant Hasbro for $4 billion, on Friday reported a widened quarterly loss as revenue in its film, TV and music unit dropped 7.6 percent.
eOne’s pre-tax loss for its first fiscal quarter widened to 43.9 million pounds ($54.7 million) from 6.8 million pounds in the year-ago period. The latest financial results come before an annual and special shareholders meeting for eOne next week in Toronto where investors will be asked to vote on the Hasbro takeover.
The toy maker aims with the transaction, which awaits regulatory approvals, to use eOne to develop and produce non-core IP that is not part of the long-term deal that has Paramount and Hasbro jointly financing projects and the Hollywood studio distributing content worldwide.
Revenue for the Peppa Pig maker fell 7 percent to 173.1 million pounds ($216.6 million), “impacted by lower Film, Television and Music [unit results] driven by lower broadcast and licensing revenues due to fewer scripted deliveries in the period, partly offset by higher music revenue through the acquisition of Audio Network and continuing organic growth,” the company said.
eOne has a substantial TV library along with theatrical distribution in Canada, the U.K., Benelux and Australia, even as the indie distributor has done fewer and more higher-profile releases in recent years.
The Canada-based and U.K.-stock market-listed company said its film, TV and music unit revenue fell from 155.7 million pounds to 143.8 million pounds ($179.8 million). It said though that family & brands revenue, which includes its hit franchise Peppa Pig, was “broadly stable” compared with the year-ago period.
eOne in recent years has shaped its business around Designated Survivor producer Mark Gordon and eOne Television; the family unit, driven by its Peppa Pig and PJ Masks franchises; international sales and production operation Sierra/Affinity; partnership in Amblin Partners with Steven Spielberg, Participant Media and Reliance Entertainment; and Brad Weston’s film and TV producer Makeready.
eOne on the film side said it continues to focus on in-house production and distribution. “John Wick: Chapter 3 – Parabellum performed well in eOne territories…. Additionally, Scary Stories to Tell in the Dark was released in August in the U.S. to a strong box office performance. eOne co-financed the film with CBS, has distribution in its territories and handled international sales through Sierra/Affinity,” the company said.
eOne pointed to Queen and Slim, the first feature from its Makeready unit that has completed production and is set for release in November. The indie studio is also co-financing two films with Paramount Pictures — the film of the classic U.S. children’s character Clifford the Big Red Dog and postapocalyptic thriller Monster Problems.
In July, Mark Gordon exited eOne as president and chief content officer to take on a multiyear producing deal with the indie studio.
As it gets set to integrate eOne, Hasbro forecasts in-sourcing and cost synergies of around $130 million by 2022, in part by bringing the target company’s toy business in-house and moving “underutilized” Hasbro content to be developed by its Canada-based partner.
