Hasbro Will Keep Wizards of the Coast as Part of Company, Rejects Call for Spinout

An activist investor's group plan to split off Wizards of the Coast from parent company Hasbro is unlikely to come to fruition. Yesterday, Hasbro announced the additions of Elizabeth Hamren and Blake Jorgensen to its board of directors, as well as its intentions to keep Wizards of the Coast as a division of the company. Hamren is the chief operating officer at Discord, while Jorgensen was previously the chief financial officer at EA. Notably, neither of the two new board members were among those proposed by Alta Fox Capital Management, an activist investor who pushed Hasbro to radically overhaul its board and abandon its Brand Blueprint business model. 

Alta Fox also wanted Hasbro to split off Wizards of the Coast into its own company, which it claimed would cause a significant spike in the company's stock price. However, Hasbro board chairman Rich Stoddart said in a letter that a Wizards spinoff "is unlikely to create value, is contrary to Hasbro's strategy, and would negatively impact the benefits Wizards realizes today from Hasbro's Brand Blueprint on a consolidated basis."

Wizards of the Coast is Hasbro's most profitable and fastest-growing division and was given a significantly larger role in the company last year. In addition to managing the Magic: The Gathering and Dungeons & Dragons franchises, Wizards is also in charge of Hasbro's digital gaming segments. New Hasbro CEO Chris Cocks previously headed Wizards of the Coast and has vowed to model other parts of the company similarly to Wizards.

When pushing for Wizards to break away from its parent company, Alta Fox leaned heavily on grassroots sentiments, noting the negative changes made to the Magic: The Gathering ecosystem and nominating a former Magic: The Gathering pro player as one of five potential board candidates. Although Hasbro interviewed two of Alta Fox's candidates, it opted for a different route. Alta Fox said it would continue to press for change in its own statement released this week. "The Board's desire to continue operating Hasbro like a family business is a flashing red light for change and an obvious indicator that shareholder-appointed directors are needed at the Company," it said.