Back in February 2008, when the studio struck the deal with Hasbro that pledged to make four or more feature films based on some of the toymaker's biggest brands, Universal Pictures then-chairman Marc Shmuger explained the rationale behind the deal to Advertising Age: “As we're gripped with fear and anxiety, we look for something we can rely on and trust.” Shmuger was speaking about moviegoers preferences for the familiar in a time of uncertainty, but he could easily have been speaking about Universal Pictures' executives own worries over their lack of franchise films. At the time, these nostalgic brands seemed like a good bet: Transformers had emerged as an unlikely blockbuster for DreamWorks the previous summer, grossing $709 million worldwide, and just nine days earlier, Paramount had started shooting Hasbro’s G.I. Joe. Universal’s only franchises were the Fast and Furious and Bourne movies (the latter of which Matt Damon was uninterested in continuing); other than that, they just had a pile of moldy B-movie monsters from the fifties. A Hasbro deal could jump-start a dependable line of profitable series.
For Hasbro, on the other hand, the deal meant finally getting the upper hand in its relationship with Hollywood. The two William Morris talent agents who lured the company away from Creative Artists Agency, Rob Carlson and John Fogelman, had done so by promising Hasbro’s then-COO (and now CEO) Brian Goldner that they could put some very nasty and sharp teeth into the language of any future studio deals — and they delivered. Universal would face multi-million-dollar penalties and the loss of the property rights if Hasbro films weren’t made in a timely manner. No more waiting around twenty years for Warner Bros. to make a film out of GI Joe: Any studio they now dealt with would pay dearly for dithering.
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The studio’s enthusiasm for Hasbro’s aggressive timetable waned. But they were trapped: The Hasbro deal contained awful consequences for delaying production. Not interested in making Battleship for 2011? Lost your Candy Land screenwriter to another studio’s project? How does a $5 million kill fee and the loss of the rights to make the film grab you? “The language was so strict, Universal begged to get out if it,” explains one insider who insisted on anonymity because of involvement in settling up another Hasbro film at the studio. "But they jammed a gun to their head to make the movies.”
Read the full story to realize Universal is going out of its way to spend $200 million on a "Battleship" movie to avoid paying Hasbro a $5 million penalty fee!