<SEC-DOCUMENT>0001769022-24-000006.txt : 20240515
<SEC-HEADER>0001769022-24-000006.hdr.sgml : 20240515
<ACCEPTANCE-DATETIME>20240515100152
ACCESSION NUMBER:		0001769022-24-000006
CONFORMED SUBMISSION TYPE:	PX14A6G
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20240515
DATE AS OF CHANGE:		20240515
EFFECTIVENESS DATE:		20240515

SUBJECT COMPANY:	

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			HASBRO, INC.
		CENTRAL INDEX KEY:			0000046080
		STANDARD INDUSTRIAL CLASSIFICATION:	GAMES, TOYS & CHILDREN'S VEHICLES (NO DOLLS & BICYCLES) [3944]
		ORGANIZATION NAME:           	04 Manufacturing
		IRS NUMBER:				050155090
		STATE OF INCORPORATION:			RI
		FISCAL YEAR END:			1229

	FILING VALUES:
		FORM TYPE:		PX14A6G
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-06682
		FILM NUMBER:		24947812

	BUSINESS ADDRESS:	
		STREET 1:		1027 NEWPORT AVE
		STREET 2:		P O BOX 1059
		CITY:			PAWTUCKET
		STATE:			RI
		ZIP:			02861
		BUSINESS PHONE:		4014318697

	MAIL ADDRESS:	
		STREET 1:		200 NARRAGANSETT PARK DRIVE
		CITY:			PAWTUCKET
		STATE:			RI
		ZIP:			02861-0200

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	HASBRO INC
		DATE OF NAME CHANGE:	19920703

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	HASBRO BRADLEY INC
		DATE OF NAME CHANGE:	19850814

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	HASBRO INDUSTRIES INC
		DATE OF NAME CHANGE:	19840917

FILED BY:		

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			Klarquist Scott
		CENTRAL INDEX KEY:			0001769022
		ORGANIZATION NAME:           	

	FILING VALUES:
		FORM TYPE:		PX14A6G

	MAIL ADDRESS:	
		STREET 1:		20 PINE STREET, APT 1117
		CITY:			NEW YORK
		STATE:			NY
		ZIP:			10005
</SEC-HEADER>
<DOCUMENT>
<TYPE>PX14A6G
<SEQUENCE>1
<FILENAME>has5152024.htm
<DESCRIPTION>LETTER TO HAS SHAREHOLDERS
<TEXT>
<p align="center">
    UNITED  STATES SECURITIES AND EXCHANGE COMMISSION
</p>
<p align="center">
    Washington,  D.C. 20549
</p>
<p align="center">
    NOTICE  OF EXEMPT SOLICITATION
</p>
<p align="center">
    Submitted  Pursuant to Rule 14a-6(g)
</p>
<p align="center">
    (Amendment  No. ____)
</p>
<p>
    1.            Name  of the Registrant:
</p>
<p>
    Hasbro, Inc. [CIK: 46080]
</p>
<p>
    2.            Name  of Person Relying on Exemption:
</p>
<p>
    Scott Klarquist
</p>
<p>
    3.            Address  of Person Relying on the Exemption:
</p>
<p>
    Available Upon Request
</p>
<p>
    4.            Written  Material. The following written materials are
    attached:
</p>
<p>
    Letter to Hasbro Shareholders.
</p>
<p align="center">
    * *  *
</p>
<p>
    Written materials are submitted  voluntarily pursuant to Rule 14a-6(g)(1)
    promulgated under the Securities  Exchange Act of 1934. This is not a
    solicitation of authority to vote your  proxy. The cost of this filing is
    being borne entirely by the filer.
</p>
<p>
    PLEASE NOTE: I am NOT asking for  your proxy card and cannot accept your
    proxy card. Please DO NOT send me your  proxy card.
</p>
<p>
    (Written materials follow)
</p>
<p>
    <strong>
        <em><u>Open Letter to Hasbro,  Inc. (HAS) Shareholders</u></em>
    </strong>
    :
</p>
<p>
    May 15, 2024
</p>
<p>
    Dear Fellow HAS Shareholders,
</p>
<p>
    Reference is made to our company's  2024 Proxy Statement, dated April 3,
    2024 (the "Proxy Statement"), in  connection with the Annual Meeting of
    Shareholders scheduled to occur on Thursday,  May 16, 2024 at 11am EST. For
    the reasons set forth below,
    <strong>
        <em><u>I strongly  urge you to vote "AGAINST" legacy stale incumbent
        Directors Cochran, Gersh, Stoddard  and West, all of whom were initially
        appointed to our Board in 2016 or earlier:</u></em>
    </strong>
</p>
<p>
    1.
    <em>
        <u>"Declining Industry" Admission Means  Breakup Should Be Considered</u>
    </em>
    : Back in May 2022, when the HAS board of  directors was under pressure from
    an activist proxy campaign waged by Alta Fox  Capital ("Alta Fox"), our
    incumbent Board and management strongly defended HAS's  "Brand Blueprint"
    strategy as follows: "<strong><em><u>The Brand Blueprint is a  winning
    strategy that has been a long-term success and is the widely emulated
    business model in the play and entertainment space</u></em></strong>. Hasbro
    has  shown that its diversified business model and balanced portfolio are
    strengths,  especially during challenging times." [Source: HAS PR 5/16/24,
    emphasis added].  Indeed, HAS succeeded in defeating Alta Fox's board
    nominees using precisely  this thesis: "Everything we are doing is correct
    and working; Alta Fox is  simply wrong".
    <strong>
        <em><u>Yet just a few months after winning the proxy contest, in
        October 2022, this same Board and management team dumped the "Brand
        Blueprint"  strategy overboard in favor of an entirely new "Blueprint
        2.0" strategy,  effectively admitting that their prior strategy, which
        they so stridently  defended against Alta Fox's challenge, had failed.</u></em>
    </strong>
    ("Guided by a  new Blueprint with the consumer as its north star, the
    Company will focus  investment on its most valuable franchises across toys,
    games, entertainment  and licensing" [Source: HAS PR 10/4/22]). Fast forward
    to 2024 and we find, in  Board Chairman's Stoddard's letter at the front of
    the 2024 Proxy Statement, the  following: "Business transformations take
    time, and 2023 was the year we reset  our business. As we navigated a
    challenging macro-economic environment and a  declining industry, we took
    aggressive steps to sharpen our portfolio focus  with the sale of eOne Film
    and TV, reset our cost base, and reduce our  inventory".
    <strong>
        <em><u>ISSUE</u></em>
    </strong>
    : Since the HAS board "won" the 2022  proxy contest (spending about $12MM in
    shareholder funds to further its  entrenchment, incidentally; see the 2022
    Proxy, page 102), HAS's stock price  has declined from $92/share to
    $62/share, or down 33% during a period in which  the Standard and Poor's 500
    Index has appreciated substantially, mainly in my opinion  due to Hasbro's
    incumbent leadership's manifold operational and capital  allocation
    failures.
    <strong>
        <em><u>Yet, despite the clear negative verdict from HAS  shareholders,
        our company still apparently refuses to consider the obvious,  namely
        separating HAS's "declining" business (its legacy consumer segment) from
        its growing business (its online gaming segment). Why???</u></em>
    </strong>
</p>
<p>
    2. <em><u>eOne Fiasco</u></em>: Two years ago, our Board  was staunchly
    defending the 2019 eOne film and TV acquisition, while admitting  that the
    timing was "unfortunate": "While the timing of our eOne acquisition  was
    unfortunate given the disruptive industry-wide impacts of the COVID-19
    pandemic on TV and film production and theatrical distribution, [w]e are on
    track to achieve our targeted $130 million of synergies from the
    acquisition. With  TV and film production returning to pre-COVID levels, the
    owned entertainment  production capabilities we have in eOne will enable
    consumers to engage with  our iconic brands across the Brand Blueprint."
    [Source: HAS PR 5/9/22]. See  also the following: "<strong><em><u>eOne is a
    highly strategic acquisition and,  despite delayed returns given pandemic
    lockdowns, positions the Company to  accelerate operational growth and
    deliver value for shareholders.</u></em></strong>" [Source: HAS PR 5/16/22,
    emphasis added]; and "eOne is on track and back in  action" [Source: HAS
    Presentation 5/16/22, slide 11]. <strong><em><u>ISSUE</u></em></strong>:
    One year after declaring eOne a "highly strategic acquisition" that would
    "deliver  value for shareholders",
    <strong>
        <em><u>our Company turned around and divested the  eOne film and TV
        business at a massive loss</u></em>
    </strong>
    , leaving the credibility  of the Board and management in shambles. By my
    calculation,
    <strong>
        <em><u>our company has destroyed over $2.2 billion of shareholder
        capital on this  disastrous acquisition to date</u></em>
    </strong>
    (2020: $218MM eOne acquisition costs;  2021: $126MM eOne acquisition costs
    and loss on disposal of eOne Music; 2023: $574MM  loss and expenses related
    to eOne Film and TV sale, plus $296MM of impairments  regarding eOne Film
    and TV, plus another $1010MM impairment of the eOne-purchased  PJ Masks
    brand. Source: 2022 and 2024 Proxy Statements). Note that this figure  does
    not account for any operating losses incurred at eOne between 2019 and
    2023.
</p>
<p>
    3. <em><u>Woeful Recent Financial Performance</u></em>:  Over the past few
    years, Hasbro's operating performance has fallen off of a veritable  cliff.
    In FY 2021, for example, the company achieved the following results: $6.4B
    revenues, $1.3B EBITDA, $1.0B operating profit, and $5.23 adjusted EPS
    [Source:  HAS Presentation 5/16/22, slide 20]. In FY 2023, however, these
    numbers declined  drastically to just $5.0B revenue (down 22% versus 2021),
    $710MM EBITDA (down  29%), $477 operating profit (down 52%), and $2.51
    adjusted EPS (down 52%)  [Source: 2024 Proxy, page 28].
    <strong>
        <em><u>ISSUE</u></em>
    </strong>
    : Hasbro's incumbent Board  and management team have collectively overseen
    (and are responsible for) the  complete financial meltdown that has taken
    place at HAS in recent years, despite  their protestations to the contrary
    that "all is fine".
    <strong>
        <em><u>WE NEED FRESH  THINKING IN THE BOARD ROOM AND C-SUITE AT OUR
        COMPANY ASAP! At a bare minimum,  this should involve putting all
        possible strategic alternatives on the table,  including the spinoff of
        Wizards of the Coast as a separately-traded entity.</u></em>
    </strong>
</p>
<p>
    4. <em><u>2022 Investor Day Targets Nowhere In Sight</u></em>:  Our company
    committed at its October 2022 investor day to the following  long-term
    targets: (A) Mid-single digit revenue CAGR that sets the Company up  to
    achieve $8.5B or greater in revenue; (B) Operating profit growth of 50% over
    the next three years, with plans to further expand operating profit margin
    to  20% by 2027; and (C) Operating cash flow of $1B+ annually, accelerating
    over  the period [Source: HAS PR 10/4/22].
    <strong>
        <em><u>HAS is tracking nowhere close to  any of the foregoing targets
        currently.</u></em>
    </strong>
    <strong>
        <em><u>Our company  finished 2023 with adjusted operating profit of just
        $477 million (down 37%  versus 2022) and exited Q1 2024 with run rate
        2024 adjusted operating profit of  about $600MM, run rate 2024 operating
        cashflow of approximately $710MM and run  rate 2024 free cashflow of
        around $530MM</u></em>
    </strong>
    [Source: HAS 2024 Proxy  and Q1 2024 10-Q filing, annualizing respective Q1
    2024 numbers by multiplying  each by 4],
    <strong>
        <em><u>a far cry from the targets outlined in clauses (B) and (C)
        above.</u></em>
    </strong>
    <strong><em><u>ISSUE</u></em></strong>: Our Board and management appear  to
    lack the ability to accurately predict the future operational performance of
    the company, and/or are incapable of executing on their vision as outlined
    above.
</p>
<p>
    5. <em><u>Underperformance Versus Peers</u></em>: Hasbro's  board issued the
    following statement almost exactly 2 years ago: "Hasbro  generated strong
    TSR vs. relevant peers in toys and games, gaming and  entertainment prior to
    COVID-19" [Source: HAS PR 5/16/22]. <strong><em><u>ISSUE</u></em></strong>:
    Since May 15, 2019, the total shareholder return (TSR) for Mattel, HAS's
    most  direct peer, is positive 78%, while the TSR for HAS over the same
    period is minus  21%, meaning
    <strong>
        <em><u>our company has underperformed MAT by 99%(!) during the  past
        five years</u></em>
    </strong>
    . In our case, insanity is leaving the same people  on the board who are
    principally responsible for this dismal underperformance,  namely directors
    Cochran, Gersh, Stoddard and West.
</p>
<p>
    6. <em><u>Lack of Insider Buying</u></em>:
    <strong>
        <em><u>ISSUE</u></em>
    </strong>
    :  Despite a massive decline in the stock price over the past 2 years, no
    HAS  insider has bought stock on the open market since the throes of the
    Alta Fox  proxy fight in May 2022.
    <strong>
        <em><u>Why are HAS insiders so hesitant to back  management's "Blueprint
        2.0" plans with their own money?</u></em>
    </strong>
</p>
<p>
    7. <em><u>Flaccid Executive Incentive Compensation  Standards</u></em>: On
    page 38 of the 2024 Proxy, we find the following: "Mr.  Kilpin [new
    President of Toys, Licensing and Entertainment] had a guarantee to  receive
    100% of his FY23 target bonus per the terms of his new hire agreement,  and
    Ms. Thomas [outgoing Chief Financial Officer] had a guarantee to receive
    100% of her target bonus per the terms of her transitional services
    agreement." <strong><em><u>ISSUE</u></em></strong>: Since when is it
    appropriate or in HAS shareholders'  interest to guarantee 100% annual
    incentive bonuses to senior executives  regardless of financial performance
    or HAS's share price performance? What is  the point of having an annual
    bonus concept included in a compensation system if  it is 100% guaranteed
    beforehand? Lack of stringent  and
    challenging standards governing the payout of senior executive compensation
    is yet another problem at Hasbro that clearly needs to be addressed.
</p>
<p>
    <strong>
        <em><u>FELLOW HAS SHAREHOLDERS, HASBRO  IS YOUR COMPANY! PLEASE MAKE
        YOUR VIEWS ON THE FOREGOING MADE TO HAS MANAGEMENT  TODAY</u></em>
    </strong>
    .
    <strong>
        <em><u>IN ADDITION, PLEASE REMEMBER TO VOTE "AGAINST" STALE  DIRECTORS
        COCHRAN, GERSH, STODDARD AND WEST AT OUR ANNUAL MEETING ON MAY 16<sup>th</sup>.</u></em>
    </strong>
    IF YOU HAVE ALREADY VOTED IN FAVOR OF ANY OF THESE DIRECTORS, THERE IS STILL
    TIME TODAY TO CHANGE YOUR VOTE. THANK YOU!
</p>
<p>
    <strong><em><u></u></em></strong>
</p>
<p>
    Source:
</p>
<p>
    Scott Klarquist
</p>
<p>
    CIO, Seven Corners Capital  Management, LLC
</p>
<p>
    info@sevencornerscapital.com
</p>
<p>
    (646) 592-0498
</p>
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
