(Bloomberg) — When Chris Cocks was named chief executive officer of Hasbro Inc. after the death of longtime head Brian Goldner, it was clear board members liked what he’d done for the company.
Others noticed his handiwork, too. An activist investor by the name of Alta Fox Capital was so impressed by the 42% growth Cocks delivered last year as head of Hasbro’s Wizards of the Coast division that it’s now pressing the Pawtucket, Rhode Island-based company to spin the business off as part of a broader fight for board seats.
That’s not all the trouble shadowing the 48-year-old CEO as he takes over the largest U.S.-based toymaker. Hasbro’s stock price performance has lagged behind that of archrival Mattel Inc. and the overall market in recent years, and Alta Fox has also raised questions about the company’s $4 billion purchase of the Entertainment One film and TV company. In January, Hasbro lost Walt Disney Co.’s sizable Princess doll business to Mattel.
After two years of double-digit sales growth, fueled in part by parents loading up on toys for kids who were stuck at home because of Covid-19, analysts expect Hasbro to increase its revenue by just 3% this year, half that of Mattel.
In an interview with Bloomberg, Cocks said his strategy going forward looks a lot like what he did at Wizards of the Coast, the division that makes the popular strategy and role-playing card games Magic: The Gathering and Dungeons & Dragons. While those products are aimed at older children and adults, Cocks said he’ll follow a similar playbook with Hasbro’s more kid-focused brands, knitting classic toy, digital and entertainment businesses together in more-profitable ways.
“We have this great opportunity to drive collectibles, playing game experiences, entertainment experiences that we connect with consumers on as early as six, seven, eight, nine or 10,” Cocks said.
Cocks arrived at Hasbro in a roundabout way. The Harvard University English graduate was marketing an osteoporosis drug for Procter & Gamble Co. in the late 1990s when his wife gave him a copy of Dungeons & Dragons for Christmas. The gift was an “epiphany,” reigniting childhood memories of playing the game. Cocks joined Microsoft Corp. to work on the Xbox console and video games like Halo and Fable.
In June 2016, the Ohio native moved to Hasbro, to become president of Wizards of the Coast, a business that had seen its growth stall. Cocks supercharged the operation, attracting more casual, social gamers with an online version of Magic: The Gathering and appealing to die-hard fans with more collectible editions of the cards.
“It was equal parts player-base expansion and player-base engagement,” Cocks said. “The deeper you engage someone, the more time they spend with you and the easier it is to monetize that time.”
By last year, sales in the division had more than doubled to almost $1.3 billion, and there’s still more to come with a Magic TV series appearing on Netflix later this year and a Dungeons film coming in 2023.
Wizards’ success “is representative of a great opportunity across our company,” Cocks said. “We will continue to lean into that and will also be leaning into that with board games and more broadly across Hasbro.”
But Cox is still facing that proxy contest. Connor Haley, the founder of Alta Fox, is proposing five new candidates for Hasbro’s board this year. Haley said he fully supports Cocks, but thinks a new board will be more in tune with creating shareholder value.
Cocks also has the support of Alan Hassenfeld, a former CEO and member of Hasbro’s founding family. “Chris is wonderful,” he said in an email.
Analysts are skeptical Haley’s board nominees will win but they seem to agree some change is afoot.
“Is it the Alta Fox slate? Maybe not,” said Jefferies Group analyst Stephanie Wissink. “But the conversation for what a change could look like for a company is coming up.”
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