Former professional Magic: The Gathering player Jon Finkel is among five nominees to Hasbro’s board that are being pushed by an activist investor as part of a plan to split Wizards of the Coast into its own company. Yesterday, news broke that Alta Fox Capital Management was pushing Hasbro to radically reorganize by splitting off the lucrative Wizards of the Coast division into its own company. Alta Fox owns about 3% of Hasbro’s stock, so it can’t force Hasbro to make these changes on its own. So, today, Alta Fox published a public website lining out its proposed changes.
Among the many surprising tidbits in the website is that one of Alta Fox’s board nominees is Jon Finkel, a former professional Magic: The Gathering player who is considered to be one of the top Magic: The Gathering players of all time. In addition to having his likeness appearing on an actual Magic: The Gathering card, Finkel is also Managing Partner and Co-Chief Investment Officer at Landscape Capital Management LLC, a hedge fund.
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Some of Alta Fox’s argument to split Wizards away from Hasbro is based around discontent from Magic: The Gathering players, with the company vowing to overhaul the digital Magic: Arena app and “listen” to customer. Among their proposals is a plan to launch multiplayer functionality, improve social functionality, and launch more subscription offerings that are cost effective for customers. Alta Fox also wants to revive the competitive Magic: The Gathering circuit through a hybrid in-person and online tournament structure. Alta Fox also references criticism about Magic: Arena’s Alchemy format, embedding a popular video by Tolarian Community College that lays out the problems with that digital-only format.
Alta Fox also references a common Dungeons & Dragons fan gripe, citing the need for a “one-stop-shop digital subscription & pay-as-you-go offering for a true-to-physical Dungeons & Dragons (“D&D”) experience.” Currently, Dungeons & Dragons have to pay for digital and physical versions of the product separately.
While Alta Fox is appealing to longtime fans and discontentment with some Wizards of the Coast products, their proposal ultimately boils down to money. Alta Fox believes that splitting Wizards of the Coast into a separate business would double the value of Hasbro’s shares by spinning off its most successful division into its own company and then revamping the remaining parts of Hasbro to become more profitable.
Hasbro provided a non-response to Alta Fox’s proposal, stating “Hasbro engages in regular communication with its shareholders as part of its robust shareholder engagement program and welcomes constructive input.”
Hasbro stockholders will vote on new directors to the board this spring. Expect more news then.
