Marvel’s tinkering with its toy licenses

Deal with Toy Biz Worldwide ends one year early

Marvel Entertainment has terminated its licensing agreement with Toy Biz Worldwide effective Dec. 31, one year earlier than the license’s scheduled termination date.

As a result, Marvel-branded action figures and other toys formerly produced by Toy Biz Worldwide will be produced by Marvel.

Marvel will record a one-time cash charge of $13 million-$16 million in the fourth quarter of 2005 related to the early termination and reimbursed research and development expenses. The charge is not reflected in Marvel’s financial guidance for 2005, last provided Nov. 9.

Marvel has embarked on a five-year license with Hasbro, which includes the rights to bring Marvel Entertainment-based toy products to retail.

Company has granted Hasbro toy and game rights to its superhero universe, including Spider-Man, Fantastic Four, X-Men and Captain America.

Through the agreement, Hasbro has obtained the rights to develop products based on Marvel’s more than 5,000 characters in a range of toy and game categories — including action figures, role play and preschool toys, board games and puzzles.

Agreement covers both the classic comicbook look of the characters as well as product lines inspired by Marvel-themed movies.

Hasbro’s first full line of products based on Marvel properties is expected to center on “Ghost Rider” and “Spider-Man 3.” Marvel has also agreed to provide services to Hasbro in connection with the licensed toys. The license guarantees Marvel $205 million in royalty and service fee payments, of which $70 million would be payable on the theatrical release of “Spider-Man 3” and $35 million upon the theatrical release of “Spider-Man 4.”

License can be extended past the five-year term, dependent on the number of other entertainment properties released during that timeframe.

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