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Goodwill | 9 Months Ended
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Sep. 28, 2025
Goodwill and Intangible Assets Disclosure [Abstract] |
Goodwill | Goodwill Changes in the carrying amount of goodwill, by operating segment, are as follows:
|  | Wizards of the Coast and Digital Gaming |  | Consumer Products |  | Entertainment |  | Total
2025 |  |  |  |  |  |  |  |
Balance as of December 29, 2024 |  | $ | 371.0 |  | $ | 1,582.0 |  | $ | 325.2 |  | $ | 2,278.2
Impairment of goodwill |  | — |  | (1,021.9) |  | — |  | (1,021.9)
Foreign exchange translation |  | (0.7) |  | 0.9 |  | — |  | 0.2
Balance as of September 28, 2025 |  | $ | 370.3 |  | $ | 561.0 |  | $ | 325.2 |  | $ | 1,256.5
|  | Wizards of the Coast and Digital Gaming |  | Consumer Products |  | Entertainment |  | Total |
2024 |  |  |  |  |  |  |  |  |
Balance as of December 31, 2023 |  | $ | 371.7 |  | $ | 1,582.3 |  | $ | 325.2 |  | $ | 2,279.2 |
Foreign exchange translation |  | (0.2) |  | (0.1) |  | — |  | (0.3) |
Balance as of September 29, 2024 |  | $ | 371.5 |  | $ | 1,582.2 |  | $ | 325.2 |  | $ | 2,278.9 |
We assess goodwill and other intangible assets with indefinite lives for impairment each year, or more frequently if events or changes in circumstances indicate an asset may be impaired. For goodwill and indefinite-lived intangible assets, our policy is to assess for impairment as of the beginning of each fiscal fourth quarter. The Company may perform a qualitative assessment and bypass the quantitative impairment testing process, if it is not more likely than not that the carrying value of a reporting unit exceeds its fair value. Due to increased tariffs, including reciprocal tariffs, announced by the U.S. government in April 2025, the escalation of ongoing trade policy disputes between international governments, the financial performance of certain reporting units being lower than previously forecasted, and other macroeconomic headwinds, during the second quarter of 2025, the Company noted downward revisions to operating income and cash flow forecasts for certain of its reporting units within the Consumer Products and Entertainment segments. As a result, during the second quarter of 2025, the Company performed an interim quantitative impairment test for the North America, Europe, Asia Pacific, and Latin America Consumer Products reporting units, as well as the Family Brands reporting unit within the Entertainment segment. Additionally, due to our ongoing transformation, we concluded that, as of the second quarter of 2025, the North America, Europe, Asia Pacific, and Latin America reporting units had similar economic characteristics and should be aggregated for purposes of testing goodwill for impairment. Our conclusion was based on a detailed analysis of the aggregation criteria set forth in ASC Topic 280, Segment Reporting, and in FASB ASC Topic 350, Intangibles - Goodwill and Other. These reporting units serve similar clients and have similar products, and as of the second quarter of 2025 had similar sourcing and distribution methods that along with our ongoing transformation has resulted in similar economic characteristics. As a result of the quantitative tests performed prior to and following the aggregation, the Company determined that the carrying values of our regional Consumer Products reporting units exceeded their expected fair values and recorded pre-tax non-cash impairment charges of $1,021.9 million within the Consolidated Statements of Operations for the nine months ended September 28, 2025. The fair values of North America and Europe were determined considering a discounted cash flow model which is primarily based on management’s future revenue and cost estimates, which included the estimated impact of tariff policies in effect and the related macroeconomic environment, and a discount rate. The fair value of the Asia Pacific and Latin America reporting units was determined considering a discounted cash flow model weighted equally with the market approach, which is primarily based on multiples of comparable public companies. No impairments were recorded related to the Family Brands reporting unit. At September 28, 2025, $325.2 million of goodwill is allocated to the Family Brands reporting unit. As of the date of the most recent test, which occurred during the second quarter of 2025, the fair value of our Family Brands reporting unit, within the Entertainment segment, exceeded the carrying value of that reporting unit by approximately 15%. The fair value of the Family Brands reporting unit was determined considering a discounted cash flow model weighted equally with the market approach which is primarily based on multiples of comparable public companies. For the Family Brands reporting unit, critical assumptions included a discount rate approximating 9.5%, a terminal value revenue growth rate of 3.0%, and a terminal operating profit margin consistent with levels achieved in recent historical periods when excluding one-time impairment and disposal charges. Although we believe the assumptions and estimates made were reasonable and appropriate, these estimates are based on a number of factors including historical experience and information obtained from reporting unit management. Actual results could differ from these estimates, especially given uncertainty related to tariffs, global trade policy, and global macroeconomic conditions.

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