Marvel Licenses Heroes to Hasbro

Hasbro will begin selling toys and games next year under the deal.
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Marvel Entertainment

(MVL)

signed an agreement that will give

Hasbro

(HAS) - Get Report

the right to make toys and games based on characters like Spider-Man, the Fantastic Four, the X-Men and Captain America.

Hasbro can start selling products in retail outlets beginning Jan. 1, 2007. Hasbro's first full line of products will likely revolve around

Ghost Rider

and

Spider-Man.

The movie

Spider-Man 3

is scheduled for release in May 2007.

New York-based Marvel said Monday that the five-year license guarantees it $205 million in royalty and service-fee payments, of which $70 million would be payable on the theatrical release of

Spider-Man 3

and $35 million when

Spider-Man 4

comes out. The license can be extended past the five-year term.

Separately, Marvel said that as a result of the pact with Hasbro, it ended its licensing agreement with Toy Biz Worldwide, a move that's effective as of this past Dec. 31. The Toy Biz deal is being ended a year earlier than the scheduled termination date, and Marvel will have to take a fourth-quarter charge of $13 million to $16 million.

In connection with the signing of the Hasbro license agreement, Marvel will receive a nonrefundable advance of $100 million, but the payment won't be immediately recognized as revenue.

Shares of Marvel were gaining 34 cents, or 2%, to $17.03. Hasbro, Pawtucket, R.I., was up 80 cents, or 4%, at $20.79.