Commitments and Contingencies

12 Months Ended

Dec. 27, 2020

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Hasbro had unused open letters of credit and related instruments of approximately $16,200 and $14,000 at December 27, 2020 and December 29, 2019, respectively.

The Company enters into license agreements with strategic partners, inventors, designers and others for the use of intellectual properties in its products. Certain of these agreements contain provisions for the payment of guaranteed or minimum royalty amounts. In addition, the Company enters into contractual commitments to obtain film and television content distribution rights and minimum guarantee commitments related to the purchase of film and television rights for content to be delivered in the future. Under terms of existing agreements as of December 27, 2020, Hasbro may, provided the other party meets their contractual commitment, be required to pay amounts as follows: 2021: $380,507; 2022: $121,399; 2023: $52,653; 2024: $32,653; 2025: $32,653; and thereafter: $32,806. At December 27, 2020, the Company had $93,675 of prepaid royalties, all of which are included in prepaid expenses and other current assets.

The Company enters into contracts with certain partners which among other things, provide the Company right of first refusal to purchase, distribute, or license certain entertainment projects or content. At December 27, 2020, the Company estimates that it may be obligated to pay $20,916 and $8,479, in 2021 and 2022, respectively, related to such agreements.

In connection with the Company’s agreement to form a joint venture with Discovery, the Company is obligated to make future payments to Discovery under a tax sharing agreement. The Company estimates these payments may total approximately $24,600 and may range from approximately $2,800 to $6,000 per year during the period 2021 to 2025, and approximately $400 in aggregate for all years occurring thereafter. These payments are

contingent upon the Company having sufficient taxable income to realize the expected tax deductions of certain amounts related to the joint venture.

At December 27, 2020, the Company estimates payments related to inventory and tooling purchase commitments may total approximately $574,323, including contractual commitments under the manufacturing agreement with Cartamundi as follows: 2021: $105,000, 2022: $95,000 and 2023: $85,000.

Hasbro is party to certain legal proceedings, as well as certain asserted and unasserted claims. Amounts accrued, as well as the total amount of reasonably possible losses with respect to such matters, individually and in the aggregate, are not deemed to be material to the consolidated financial statements.