Commitments and Contingencies

12 Months Ended

Dec. 25, 2022

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and ContingenciesHasbro had unused open letters of credit and related instruments of approximately $11.9 million and $13.6 million at December 25, 2022 and December 26, 2021, 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 25, 2022, Hasbro may, provided the other party meets their contractual commitment, be required to pay amounts as follows: 2023: $149.4 million; 2024: $64.8 million; 2025: $70.5 million; 2026: $73.0 million; 2027: $10.0 million; and thereafter: $13.0 million. At December 25, 2022, the Company had $12.9 million of prepaid royalties, all of which are included in prepaid expenses and other current assets

Interest payment obligations on the Company's fixed-rate long-term debt are as follows: 2023: $145.9 million; 2024: $145.9 million; 2025: $130.9 million; 2026: $130.9 million; 2027: $104.0 million; and thereafter: $719.1 million. See note 11 for information on repayment terms for the Company's variable rate term loans.

The Company enters into contracts with certain partners which among other things, provide the Company with the right of first refusal to purchase, distribute, or license certain entertainment projects or content. At December 25, 2022, the Company estimates that it may be obligated to pay $18.9 million and $4.5 million, in 2023 and 2024, 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 $15.6 million and may range from approximately $0.4 million to $6.4 million per year during the period 2023 to 2026, with no remaining payments due 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 25, 2022, the Company estimates payments related to inventory and tooling purchase commitments may total approximately $452.7 million, including the remaining contractual commitment of $85.0 million in 2023 under the manufacturing agreement with Cartamundi.

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.

See note 17 for additional information on the Company's future lease payment commitments. See note 11 for additional information on the Company's long-term debt and production financing repayments.