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TOY BIZ, AN UNEXPECTED JOURNEY
Toy Biz brought us the most comprehensive and detailed line of action figures that Middle Earth had ever seen. The small company had a very complicated history, full of highs and lows. While we know the quality and dedication put into our favorite figures, what was the journey like for the those who made the toys?
TOY BIZ, A COMPLICATED HISTORY
Originally founded in Montreal, Quebec as Charan Toys. Steven Lebensfeld co-founded Toy Biz with associates from HG Toys IN 1987. Within a year of its start, Toy Biz held the exclusive license for action figures based on characters from Marvel Comics and DC Comics, including Batman, Spiderman and Superman.
"We were instantly the largest action figure company in the market. It was unbelievable,'' said Lebensfeld, "Here we were, a little company doing about $4 million in sales a year when we get this incredible license".
In 1990, the thriving Toy Biz was purchased by Ron Perelman - who had acquired the Marvel Entertainment Group in January of 1989. By mid 1993, Perelman had closed a deal with Ike Perlmutter and Avi Arad, two Israeli immigrants who later ran Toy Biz. In 1998, Toy Biz merged with Marvel Entertainment Group to form Marvel Enterprises, with Toy Biz becoming its main toy subsidiary. A perpetual license to make toys based on Marvel characters, was acquired without paying any royalties. This included a catalog of 4700 characters. Marvel received 46% of Toy Biz earnings, as part of the agreement.
Toy Biz focused strongly on creating toys based on Marvel Comic's cast of characters, which includes the Amazing Spider-Man, the Incredible Hulk, and the Uncanny X-Men. By the mid-1990s, Marvel-related action figures and playsets generated about 50 percent of Toy Biz annual sales.
On December 31, 2005 Marvel terminated its licensing agreement with Toy Biz Worldwide Ltd. This was a full year earlier than the contracted license agreement. As a result of the early termination, Marvel Entertainment paid Toy Biz Worldwide a penalty of between $13-16 million USD. Marvel Enterprises was renamed to Marvel Entertainment. In 2006 Marvel Entertainment signed a five-year licensing agreement with Hasbro Inc. for $205 million, giving Hasbro the right to make toys and games based on Marvel Comic licenses.
Marvel Entertainment declared bankruptcy, and Hasbro acquired the rights to the master toy license for Marvel owned characters, with the first products releasing in January 2007. For a very short period, Marvel attempted to stay afloat with Non-Marvel characters, but the end of 2007 would see their demise.
TOY BIZ ACQUIRES EXTENSIVE PRODUCT RIGHTS
Following an incredibly successful decade of Marvel Hero toys, Toy Biz landed one of the most coveted licenses in Hollywood, as New Line Cinema named the toy company the master toy licensee for the most eagerly awaited fantasy epic The Lord of the Rings. The multi-year agreement provided Toy Biz with extensive worldwide product rights to all three films based on J.R.R. Tolkien's world-renowned literary phenomenon.
Avi Arad, Chief Creative Officer for Marvel Enterprises, Inc., spoke about the deal.
"Marvel is pleased to be extending its relationship with New Line. This movie franchise has the potential to be one of the biggest blockbusters of all-time. Since we have worked with New Line in the past with the Blade movie franchise, we know their marketing power and understand their goals. With that in mind, we feel that Toy Biz is well suited to deliver the types of innovative toy products expected to accompany a movie franchise of this stature".
The deal was announced by Avi Arad, Chief Creative Officer for Marvel Enterprises, Inc., Alan Fine, CEO of Toy Biz and David Imhoff, Executive Vice President, Worldwide Licensing and Merchandising, New Line Cinema.
"The Lord of the Rings trilogy is, without a doubt, one of the most immense and magnificent projects in the history of film," stated Imhoff. "We have no doubt that this property will be the absolute highlight of Licensing 2000 with momentum only growing stronger in the months ahead. In choosing Toy Biz, New Line has selected one of the category innovators. We are thrilled to have them on board." Fine added, "With its intricately detailed fantasy world, incredible range of highly-unique fantasy characters, and a story that has captivated kids and adults alike for more than 40 years, The Lord of the Rings has enormous potential in the marketplace. New Line's aggressive and innovative marketing plan for the trilogy is truly groundbreaking. Their commitment and complete dedication to the brand is already creating amazing excitement around the films. We are looking forward to working with New Line to create a compelling product line-up that captures the depth, spectacle and appeal of these highly-anticipated movies".
Toy biz was in competition for the license with many other companies, including Toy Vault, also known as Middle Earth Toys, who was making Lord of the Rings figures (based on the books) at the time. Jon Huston, president of Toy Vault was rumored to have been in meetings with New Line and Tolkien Enterprises and pursuing the license. Jon was quoted: "Toy Vault is not making any public statements concerning the Middle-earth license at their attorneys’ direction until the legal issues are resolved. The Toy Vault license, acquired from Tolkien Enterprises before Peter Jackson’s production of “The Lord of the Rings” commenced, does not provide for any association with the current movies. The movie-based toy license was awarded to Marvel Comics’ Toy Biz division a few weeks ago".
The initial reports were that many products were in development. Categories including: action figures and accessories, dolls, radio control, remote control and infrared toy products, collectible marbles and accessories, electronic and non-electronic plush, flying toys and LCD watches. Toy biz would go on to produce action figures and role play toys.
OUTSOURCING TO HONG KONG
In July 2001, Marvel entered into a 5 1/2-year exclusive Toy License for action figures, accessories and role-playing toys, based on Marvel characters other than Spider-Man: The Movie, with Toy Biz Worldwide Ltd., a company formed by a Hong Kong-based toy manufacturer controlled by Mr. Jeff Hsieh. Mr. Hsieh had built a strong track record as a high-quality vendor with Marvel's Toy Biz division since 1990.
Marvel licensed the use of the Toy Biz name and logo to Toy Biz Worldwide, Ltd. in order to best leverage the strong Toy Biz consumer brand identity and the positive retail relationships established by Marvel's Toy Biz division over its 11-year history of producing Marvel character-based toys. Toy Biz Worldwide Ltd. was an OEM toy manufacturer, that did not possess the design, development, sales or marketing expertise required to be an "end-to-end" toy company. Accordingly, Toy Biz Worldwide Ltd. entered into an agency agreement with Marvel to which Marvel's Toy Biz division was contracted to perform critical functions such as toy product design, development, marketing and acting as the worldwide sales agent for Marvel-licensed toys. In addition to royalties, as compensation for the value-added services provided to Toy Biz Worldwide Ltd., Marvel receives a service fee based on the wholesale price of toys produced under the license agreement.
Marvel also received a service fee of 24.5% of wholesale toy sales in the U.S. to compensate Marvel for toy design, sales and marketing and other services provided to Toy Biz Worldwide, Ltd. and, in part, for the utilization of senior executives from Marvel's Toy, Licensing and Studio divisions who regularly meet with major retailers to market upcoming Marvel-branded toys and merchandise. For sales in international markets, where Marvel relies principally on independent distributors, Marvel receives a service fee amounting to 10% of Toy Biz Worldwide Ltd.'s international wholesale sales for its efforts in managing the distributors.
Mr. Hsieh, Toy Biz Worldwide Ltd.'s CEO commented, "This license agreement enabled me to optimize the capacity utilization of my manufacturing facilities and purchase raw materials more efficiently while leveraging the proven toy design, development expertise and brand of Marvel's Toy Biz division. While I manufacture goods for customers other than Marvel, this license allows my company to more effectively manage my overall business, improving my net margins without much incremental overhead".
AN AMAZING LINE
From 2001 to 2005 Toy Biz provided superb action figures based on Peter Jackson's Lord of the Rings Trilogy. Stores all over the world stocked their shelves full of Hobbits, Orc and Elves. A massive online community traded images of their collections, and met in online forums to talk the hobby. In the end they would offer over 280 different releases to a hungry fan-base. While the line was a huge success with strong sales throughout, the conclusion of the trilogies theatrical run meant that interest in the line would eventually decline. The license was also set to expire in 2005, and with these events the line would ultimately come to an end that year. Many new waves and new characters were planned and prototyped, leaving loyal fans wanting more. In the end, a rich and diverse world was created. Toy Biz had ruled the first half of the 2000's, winning awards for figures like it's Electronic Sauron and Gandalf the White. Every major magazine featured its work. Website's were spawned, dedicate to collecting the line. It was a major success.
Along the way, Toy Biz worked with WETA, Gentle Giant, Design Force, New Line Cinema, countless 3rd party sculptors, painters and so many other great companies. It was their dedication to quality and innovation that drove their success. Toy Biz's The Lord of the Rings catalog is one of the greatest action figure lines ever created and is still being coveted 20 years later.