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Speaker 1: Unon Cries is the see of Mattel, one of the

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Speaker 1: leading toy companies in the world. It's the manufacturer of,

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Speaker 1: among other products, the Barbie doll. I had a chance

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Speaker 1: to sit down with the CEO recently talk about how

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Speaker 1: he's trying to transform a traditional toy company into one

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Speaker 1: that takes advantage of, among other technologies, artificial intelligence. Now,

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Speaker 1: the toy world is not a world that I know

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Speaker 1: that well. I do have some young grandchildren and get

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Speaker 1: them some toys from time to time, but I don't

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Speaker 1: really pay attention to where the toys are manufactured. My

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Speaker 1: assumption is that most toys in the United States are actually

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Speaker 1: manufactured overseas, and maybe a large number that was in China.

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Speaker 1: Is that a fair assumption, that's correct.

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Speaker 2: The industry average is about eighty twenty five percent of

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Speaker 2: toys being made in China.

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Speaker 3: Fu Mattel.

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Speaker 2: We've been reducing and rebalancing a manufacturing footprint so that

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Speaker 2: no one country by the end of twenty seven will

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Speaker 2: represent more than twenty five percent of our global manufacturing.

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Speaker 2: China represent for US today around thirty five percent of

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Speaker 2: our global manufacturing. Relative to in this reverage of eighty

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Speaker 2: twenty five percent. But this journey was not about China.

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Speaker 2: It was about balancing and diversifying manufacturing footprint so that

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Speaker 2: we're not dependent on any one country.

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Speaker 1: As we talk today, President Trump is shortly going to

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Speaker 1: be meeting with the President Cigping, presumably that deal with

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Speaker 1: tariffs and other things. But today the tariffs that have

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Speaker 1: been imposed on China has had adversely affected toy companies

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Speaker 1: and particularly in MATEL. Well.

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Speaker 2: At the start of the year, the issue was about

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Speaker 2: cost impact of tariff on product. Then the question became

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Speaker 2: what about consumer reaction to price increase in response to tariff.

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Speaker 2: Now what we're seeing is that we companies have mitigated

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Speaker 2: for the cost impact. Consumer demand for toys is growing,

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Speaker 2: has been growing every quarter in the US and overseas.

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Speaker 2: What we have seen is that retailers have postponed their

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Speaker 2: decision and making orders to the very back end of

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Speaker 2: the year. But seeing that there is demand, there is

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Speaker 2: consumer demand, people are buying product at retailers. We expect

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Speaker 2: to see a good Holia decision and a strong growth.

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Speaker 3: Core of fu MATEL.

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Speaker 1: Now about fifty percent of the tariffs that have been

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Speaker 1: imposed by the federal government have not been passed along

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Speaker 1: to customers. They are being absorbed by the people that

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Speaker 1: are paying the tariffs. Are you absorbing a large part

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Speaker 1: of the tariffs or are you passing along some of it?

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Speaker 2: Well, we have several mitigating actions that we're taking. Much

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Speaker 2: of it is about diversifying manufacturing footprint and using the

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Speaker 2: fact that we are making product in seven different countries

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Speaker 2: so you can optimize and modulate and create a flexible

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Speaker 2: model that respond to tariff and shifting market conditions. And

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Speaker 2: this is very much part of our journey to create

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Speaker 2: a flexible sublition that is responsive.

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Speaker 1: As the tariff have now come in and some extent

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Speaker 1: there might be increased, it might be a decreased. But

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Speaker 1: how has that changed your relationship with retailers? Are they

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Speaker 1: absorbing the tariffs or you obs or in the tariffs

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Speaker 1: or as it split.

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Speaker 2: We work very closely with our retail partners. We are

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Speaker 2: fundamentally a business to business company. We sell to the retailers,

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Speaker 2: they sell to the consumers. But together we are trying

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Speaker 2: to create a holistic experience that drives demand and we

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Speaker 2: work with them to help them sell products. We spend

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Speaker 2: significant resources in demand creation. We sell product as a

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Speaker 2: company in five hundred thousand stores globally. This is just

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Speaker 2: a brick and mortar business, not including online retail and

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Speaker 2: e commerce. So understanding the retail landscape and working in

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Speaker 2: close collaboration with our retail partners is core competence to

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Speaker 2: what we do, and we do that really well.

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Speaker 1: The most famous toy you probably have, I assume it's

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Speaker 1: Barbie Doo. When was the Barbie doo actually invented? And

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Speaker 1: why is it so popular for such a long period

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Speaker 1: of time.

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Speaker 2: Barbie was invented in nineteen fifty nine. But Barbie is

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Speaker 2: so much more than a doll. Barbie is a pop

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Speaker 2: culture icon. And we as a company, what we do

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Speaker 2: really well is we keep our brands fresh, relevant, current

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Speaker 2: and culturally relevant a clear a clear part of our

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Speaker 2: playbook is infuse brand purpose and cultural relevance, the relevance

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Speaker 2: into everything we do. And Barbie is the posted child

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Speaker 2: of that strategy.

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Speaker 1: All right, So there's the can dow, there's the Barbie down.

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Speaker 1: It still is your biggest selling toy.

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Speaker 2: Actually, Hot Wheels right now is a bigger selling product

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Speaker 2: than Barbie. Hot Wheels was created eight years nine years

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Speaker 2: sorry after Barbie, and Hot Wheels is very much about

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Speaker 2: car culture. Hot wheels as a as a toy is

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Speaker 2: the number one selling item in the industry. So these

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Speaker 2: cars are performance cars. The race in orange tracks and

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Speaker 2: around that we make content, video games, location based entertainment,

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Speaker 2: car shows, races, and it's a whole encompassing experience around cars.

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Speaker 1: Let's talk about film. Barbie had a movie a few

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Speaker 1: years ago which turned out to be spectacularly successful, was

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Speaker 1: nominated for Academy Awards, and it did incredible at the

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Speaker 1: box office. I assume you were behind that because you

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Speaker 1: have a background in that area. Was that your idea

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Speaker 1: to do a Barbie.

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Speaker 2: Film, Well, it was part of our strategy, and yes,

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Speaker 2: three weeks after I started, after I joined the company,

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Speaker 2: we started that journey. The goal was not simply to

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Speaker 2: create a movie, and it wasn't a movie that was

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Speaker 2: designed to sell toys. It was about creating a cultural event.

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Speaker 2: And this movie went on to become one of the

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Speaker 2: most successful movies of all time, and in fact, became

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Speaker 2: Warner Brothers most successful movie at the box office ever

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Speaker 2: in one hundred years.

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Speaker 1: Now. Hollywood is not famous for doing sequels, right, so

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Speaker 1: I assume there will be a sequel. Barbie and Barbie two,

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Speaker 1: three and four right.

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Speaker 2: Well, we always said we're looking to build film franchises.

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Speaker 2: We haven't announced anything a second live action movie, but

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Speaker 2: we have announced that we're developing an animated Barbie movie

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Speaker 2: with Chris Maladandris Illumination, which is one of the most

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Speaker 2: successful animated filmmakers of all time. So it's going to

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Speaker 2: be a very exciting project that we'll reimagine Barbie in

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Speaker 2: a new way.

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Speaker 1: Now, in many companies, when there's a manufacturer product, the

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Speaker 1: CEO tests the product and says works or not. So

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Speaker 1: how do you say, yes, let's do this toy, or

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Speaker 1: we're not going to do this toy. Who's your expert

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Speaker 1: in deciding to do this or not?

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Speaker 3: This is what we do as a company.

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Speaker 2: We make product that engages and connects with people, and

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Speaker 2: we have experts all over the world. We have people

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Speaker 2: that specialize in different categories of product, and of course

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Speaker 2: we do a lot of testing, a lot of trials

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Speaker 2: and testing in our own labs, innovation labs, play labs.

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Speaker 2: One such example that just recently came to life is

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Speaker 2: a reinvention of the hot wheels orange tracks that have

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Speaker 2: been around for decades, and we discovered through research that

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Speaker 2: it's actually a little hard for young kids to connect parts,

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Speaker 2: and we came up with a whole new system that

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Speaker 2: is very simple and easy to connect with a snap

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Speaker 2: just to one hand, and at the same time is

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Speaker 2: actually higher performing in terms of speed the speed of

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Speaker 2: the car that the cars can drive on the tracks.

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Speaker 2: So it was a way to reimagine a tried and

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Speaker 2: tested play pattern in new and exciting ways through research.

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Speaker 1: When you have advertisement for toys, are you doing the

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Speaker 1: advertisement so it appeals to a child four or five

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Speaker 1: sixty seven or to the adult? How do you make

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Speaker 1: the advertisements appear to both if possible, or just do

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Speaker 1: you tag target just one age group, the children or

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Speaker 1: the parent.

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Speaker 2: We don't think of it in terms of advertising or

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Speaker 2: even marketing. It's about demand creation. Children are the most

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Speaker 2: sophisticated consumer out there. They can smell any thing that

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Speaker 2: is not authentic a mile away. So whatever we do

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Speaker 2: has to be authentic and connect to the brand values.

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Speaker 1: So let's talk about most recently, you had earnings and

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Speaker 1: your earnings didn't go quite what the analyst thought it

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Speaker 1: was going to be. Is that always a problem with

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Speaker 1: analysts or always have higher expectations and the reality, you.

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Speaker 2: Know, we don't manage the company quarter by quarter. We

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Speaker 2: guide it for certain numbers for the full year and

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Speaker 2: we expect to meet those numbers. As I said that

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Speaker 2: at the beginning, part of what is shaping this year

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Speaker 2: is shifting orders by retailers to delay some of their decisions.

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Speaker 2: So we saw a lesser third quarter and we expect

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Speaker 2: a higher fourth quarter.

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Speaker 1: So as people are getting ready to buy toys for

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Speaker 1: Christmas season, what do you want them to know the

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Speaker 1: most about what they should be buying in the toy world.

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Speaker 2: You know, we are so proud of what we do

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Speaker 2: Every Christmas. We create product that we believe stands out

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Speaker 2: in a very crowded aisle, the toy isle, and our

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Speaker 2: job is to continue to do things that will excite

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Speaker 2: and delight fans and partner with our retailers to create

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Speaker 2: an offering that will be very compelling. Of course, it's

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Speaker 2: always about Barbie, Hot Wheels, American Girl, Fisher Price U,

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Speaker 2: No Monster, High Endless collection across multiple price points. You

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Speaker 2: can buy a Hot Wheels Dykas's car for a dollar

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Speaker 2: twenty five, or you can buy a collector set that

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Speaker 2: we did together with Daniel Arsham, a famous artist, for

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Speaker 2: seven hundred dollars on matel creation.

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Speaker 1: And when you're dealing with Christmas, you have to figure

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Speaker 1: out you get new toys designed so that that's something different,

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Speaker 1: or you get old, reliable toys that you know the

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Speaker 1: parent is going to say, yes, this kid will like

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Speaker 1: it because it's been around for a while.

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Speaker 2: It's it's a combination of both, and it's art and science.

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Speaker 2: There's no playbook and there's no predictable you know Panett

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Speaker 2: patent that you try to follow in many ways, you

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Speaker 2: invent and you create product and create the demand. But

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Speaker 2: what we are seeing in a world of unlimited shelf

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Speaker 2: space and ubiquitous distribution, the big brands win. The big

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Speaker 2: brands that have the awareness and built in fan base

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Speaker 2: always have the advantage.

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Speaker 1: So if I could ask you the obvious question, what

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Speaker 1: is somebody who was born in Israel, educated to some

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Speaker 1: extent the United States, and really a media executive doing

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Speaker 1: running a toy company.

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Speaker 2: Well, the opportunity was to take a company that thought

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Speaker 2: it's a toy manufacturing company and turn it into an

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Speaker 2: IP company.

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Speaker 3: We own one of the strongest.

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Speaker 2: Portfolios in the world in children and family entertainment, and

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Speaker 2: the opportunity that I saw that excited me was to

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Speaker 2: come in and help the company capitalize and capture the

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Speaker 2: full value of our intellectual properties outside of the toy isle,

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Speaker 2: not instead of what we're doing toys, but in addition

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Speaker 2: to that.

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Speaker 1: So when you recruited to run Mattel, they had already

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Speaker 1: had a lot of CEOs who didn't last. So why

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Speaker 1: would you take this job?

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Speaker 2: Yes, being the fourth CEO in four years is a

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Speaker 2: challenging start, but I always believed in the company. I

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Speaker 2: believed in the brands, and I really saw the potential

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Speaker 2: of taking a company the thought it's in the manufacturing

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Speaker 2: business and tended to become an IPA company. And today

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Speaker 2: we're evolving even further from being an IPA company to

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Speaker 2: being a brand management company. And in a world where

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Speaker 2: everything revolves around big brands, this is a very exciting opportunity.

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Speaker 1: Let's talk about your background for a moment. You don't

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Speaker 1: have a Los Angeles accent where you live now, so

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Speaker 1: let's talk about where you were born. Where were you born?

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Speaker 1: I was born in Tel Aviv, Tel Aviv, and how

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Speaker 1: long did you live there?

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Speaker 3: I grew up in Israel.

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Speaker 2: I lived there until I was twenty six, and then

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Speaker 2: I came to America, went to Los Angeles to study

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Speaker 2: business to UCLA, and I stayed in the US and

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Speaker 2: lived in Europe ever since.

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Speaker 1: So when you were a boy, what was your ambition

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Speaker 1: to be a toy manufacturer or what.

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Speaker 2: I was a very happy kid, into sports and outdoors

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Speaker 2: and always wanted to get into business. When I grew up,

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Speaker 2: I always had a map of the world in my bedroom.

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Speaker 2: My mother came from England and her side of the

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Speaker 2: family lived in the UK, and we used to have

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Speaker 2: guests and friends from her side coming to Israel. And

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Speaker 2: I was always fascinated meaning people from other countries, other places,

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Speaker 2: and that probably formed part of my interest to do

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Speaker 2: things that would be more global.

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Speaker 1: But you were a champion athlete as a child, Is

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Speaker 1: that true?

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Speaker 2: I was an active athlete. I used to compete in swimming.

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Speaker 2: I played soccer in the league. I got into water sports.

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Speaker 2: Always did something to do with sports.

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Speaker 1: Okay. So you went to university in Tel Aviv, Tel

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Speaker 1: Aviv University, and what did you major? In?

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Speaker 3: Economics and management?

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Speaker 1: Okay? So you get your degree and you say to

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Speaker 1: your parents, thank you for raising me here, but I'm

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Speaker 1: going to move all the way to the United States.

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Speaker 1: In fact, so far in the United States, it's going

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Speaker 1: to be in California, so you maybe not see me

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Speaker 1: too much anymore. Is that what you said?

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Speaker 3: Pretty much? And what did they say?

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Speaker 2: They say, we'll support you, We right behind you. It's

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Speaker 2: what my mother did to her parents when she moved

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Speaker 2: from London to Tel Aviv and ended up doing the

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Speaker 2: same thing to her right.

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Speaker 1: She went to business school at UCLA. When you showed

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Speaker 1: up at UCLA where a lot of Israeli students there

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Speaker 1: then or not.

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Speaker 3: There were no no Israeli students.

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Speaker 1: No no, So you said to them, I want to

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Speaker 1: break into the movie business, and they said to you,

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Speaker 1: nobody Jewish is in the movie business right the uh?

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Speaker 2: You know, back in the day, it was a lot

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Speaker 2: about making building connections and relationships. Of course, today with

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Speaker 2: the advent of the Internet and availability of information, is

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Speaker 2: a lot harder. Back in the day, you had to

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Speaker 2: really find your way around, and I exactly did that.

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Speaker 2: I interned at five different companies when I was a

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Speaker 2: student at UCLA. With the calling card of an NBA student,

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Speaker 2: you can open a few doors. But from then on

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Speaker 2: it's about gaining the experience and building the relationships.

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Speaker 1: You graduated what did you do when you graduated UCLA

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Speaker 1: Business School.

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Speaker 2: One of the things I did not want to do

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Speaker 2: is to follow the bit and path of what NBA

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Speaker 2: students use to do at the time, get a job

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Speaker 2: in consulting or banking. I try to. I said, I

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Speaker 2: would find my own thing or do something unique and

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Speaker 2: different that is not in line with the business school playbooks.

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Speaker 1: In other words, you didn't want to be something important

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Speaker 1: like a private equity investor that's excited not to all right,

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Speaker 1: and you didn't want to be a McKinsey consultant. So

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Speaker 1: what did you do?

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Speaker 2: I ended up as part of my networking meeting Heim Saban.

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Speaker 1: A famous Israeli born businessman in the la right. But

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Speaker 1: at the time and he just started to come out

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Speaker 1: to the Power Rangers. He was not the hims Saban

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Speaker 1: that you know today. It was actually an American friend

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Speaker 1: who connected us. We spoke English in the beginning when

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Speaker 1: we met. He was not looking for to hire anyone

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Speaker 1: and I was not looking for a job. But within

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Speaker 1: fifteen minutes there was a physical clique between us, and

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Speaker 1: he said to me, why didn't you join me? I'll

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Speaker 1: teach you everything about my company. I always say that

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Speaker 1: I got my BA from Tel Aviv University, my MBA

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Speaker 1: at UCLA, and my PhD with him. Saban now Heim

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Speaker 1: Saban made a lot of money in cartoons. I think

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Speaker 1: it was at one point he sold it I thank

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Speaker 1: to Disney or it was it Disney or the Fox,

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Speaker 1: I can't remember who he sold it to. He sold

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Speaker 1: his UH cartoon company at a very good price and

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Speaker 1: then stayed in UH. The m the motion picture book

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Speaker 1: world and and the communications world. So you went into that.

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Speaker 2: He had a small production company UH in Los Angeles.

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Speaker 2: We ended up creating a joint venture with Fox that

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Speaker 2: was called Fox Kids or Fox Family at the time.

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Speaker 2: I moved to London to build the European business for

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Speaker 2: him for this joint venture for him and group at

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Speaker 2: Murdock at the time, and the UH opportunity was to

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Speaker 2: create and launch children's channels in local languages across Spay

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Speaker 2: television in Europe. This was the beginning of digital television

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Speaker 2: in Europe and we ended up building a company that

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Speaker 2: broadcasted children channels in over fifty countries and seventeen languages

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Speaker 2: that we took priv We took public and eventually sold

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Speaker 2: the whole group to Disney.

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Speaker 1: And uh, what background did you have that qualified you

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Speaker 1: to do all this?

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Speaker 2: It's a question that I used to ask myself at

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Speaker 2: the time, because the deetre for this joint venture was

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Speaker 2: to take the success in the US and export it

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Speaker 2: to the world. I was actually looking for someone to

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Speaker 2: run this business, to build this business from scratch and

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Speaker 2: run it, and we couldn't find the right person. And

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Speaker 2: I was going down the list of candidates with time

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Speaker 2: one day and no one was quite right for the job.

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Speaker 2: And he said to me, you know what, why don't

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Speaker 2: you do it? Why didn't you do it? And I said,

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Speaker 2: you know what, I will. When will you start? I

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Speaker 2: just did and I ended up we were on our

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Speaker 2: way to New York at the time. I continued from

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Speaker 2: New York to London, hired rented an office on my

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Speaker 2: way to the airport in London, went straight from the

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Speaker 2: airport to the office and launched the business.

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Speaker 1: So a headhunter presumably called you and said, what about

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Speaker 1: running a toy company? And you said, I don't really

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Speaker 1: know toys, or you didn't say that.

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Speaker 2: The opportunity in Mattel and what I was doing back

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Speaker 2: then is much broader than that. I was not pay

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Speaker 2: television executive per se. But we saw the opportunity of

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Speaker 2: taking brands and building businesses around them, and leveraging the

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Speaker 2: fandom and the relationship would have with people to create

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Speaker 2: commercial enterprises.

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Speaker 1: You're a toy manufacturer, but what percentage of your revenues,

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Speaker 1: let's say five years from now, would you like to

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Speaker 1: actually have revenues and er earnings coming from non toys,

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Speaker 1: let's say pictures or motion picture television, things like that.

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Speaker 2: We expect a significant amount of profit to come through entertainment.

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Speaker 2: This is all of the activities around around the brands

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Speaker 2: and IP. Most of this business is royalty driven, so

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Speaker 2: you see most of the lift in profit, some in revenue,

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Speaker 2: but mostly in profit. So much higher margin and better

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Speaker 2: quality profit and growing at a significant rate.

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Speaker 1: The toy that I remember brand that I remember buying

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Speaker 1: a lot of toys was called Fisher Price, and the

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Speaker 1: theory was that these were educational toys more than regular

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Speaker 1: display toys. But is that what Fisher Price was about.

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Speaker 2: Absolutely, Fisher Price is for obviously younger consumers, babies, toddlers,

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Speaker 2: and infants, and this is about quality, trusted product that

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Speaker 2: has deep educational and developmental value. We spend significant resources

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Speaker 2: in defining and creating product that do exactly that. And

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Speaker 2: we still have labs the headquarter of Fisher Prices in

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Speaker 2: East Aurora, Upstate New York, and this is what the

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Speaker 2: team does. This part of the industry is product driven

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Speaker 2: where you sell to the parents under the umbrella of

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Speaker 2: the Fisher Price brand, which stands for trust, quality and

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Speaker 2: developmental values for the child.

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Speaker 1: Now, every parent I know always says when their child

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Speaker 1: is about six months old, my child might be a genius,

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Speaker 1: really brilliant.

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Speaker 2: You know the many proofs that play is a very

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Speaker 2: important part of developing children, and we think about it

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Speaker 2: all the time in terms of what patterns, what engagement

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Speaker 2: can we do to develop children through play.

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Speaker 1: When I talk to somebody, the question you invariably want

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Speaker 1: to ask is how is artificial intelligence affecting your industry.

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Speaker 2: We're very excited about AI. We just recently announced a

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Speaker 2: partnership with open AI that has two parts. It's about

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Speaker 2: how we work and how we do things in terms

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Speaker 2: of infusing technology to accelerate innovation, invention and do what

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Speaker 2: we do even better and faster. The other part is

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Speaker 2: infusing technology into product and experiences and elevating and elevating

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Speaker 2: the play pattern and creating something that would be even

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Speaker 2: more attractive and more engaging to fans.

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Speaker 1: What type of toys do you imagine would come out

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Speaker 1: of a relationship with an artificial intelligence company.

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Speaker 2: As we're being very mindful of creating product that will

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Speaker 2: leverage and benefit from the technology, clearly thinking about safety, privacy,

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Speaker 2: and other important issues when we think about product that

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Speaker 2: infuses AI. This is not about an AI speaking Barbie.

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Speaker 2: We're thinking of AI in other ways to elevate the

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Speaker 2: play pattern and create experiences that are more engaging through technology.

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Speaker 1: You had a Barbie movie, maybe you'll have another one.

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Speaker 1: You have any other toys that might be made in

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Speaker 1: the movies or theatrical presentations.

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Speaker 2: Well, we are releasing next year in twenty twenty six

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Speaker 2: two big movies Masses of the Universe, a big world

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Speaker 2: creation superhero franchise that we are launching as a big

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Speaker 2: movie in partnership with Amazon MGM, and right after that

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Speaker 2: a movie based on Matchbak the Cars together with Skuidance.

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Speaker 2: What will be interesting is for people to see the

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Speaker 2: breadth of our offering from the Barbie Pink through the

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Speaker 2: dark world of Eternia and everything in between. But it's

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Speaker 2: important to say this is not just about Barbie and

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Speaker 2: not just about movies. It's about creating holistic experiences across

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Speaker 2: multiple verticals, multiple entertainment verticals that are all looking for

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Speaker 2: big brands to drive the business.

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Speaker 1: Masters of the Universe. Is not about Wall Street investment bankers, right, It's.

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Speaker 2: About he men, and I promise you you will enjoy

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Speaker 2: this movie as much as you enjoyed Barbie.

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Speaker 1: So today, what is your biggest single challenge as the

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Speaker 1: CEO of this important toy company? What is your biggest

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Speaker 1: worry every night when you go to sleep?

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Speaker 2: Mostly about missing opportunities. There's so many opportunities out there,

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Speaker 2: especially given the strength and appeal of our brands, that

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Speaker 2: priority prioritization becomes a key part of what we do,

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Speaker 2: and you always think about how do we not miss

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Speaker 2: on so many opportunities in front of us. There is

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Speaker 2: so much to play with and so much to play for.

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Speaker 2: The value creation is enormous for Matil, given the strength

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Speaker 2: of our brands and given what we do. Toys as

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Speaker 2: an industry is growing, is not going anywhere, and the

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Speaker 2: opportunity for Matil is to continue to grow within the

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Speaker 2: toy aisle and find so much more upside in all

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Speaker 2: these other verticals in a world where everybody is looking

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Speaker 2: for big IP and big brands to rise above the

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Speaker 2: noise level and reach the consumer.

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Speaker 1: Thanks for listening to hear more of my interviews. You

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Speaker 1: can subscribe and download my podcast on Spotify, Apple, or

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Speaker 1: wherever you listen