Hasbro and Discovery Form Children's TV Network

Toy maker Hasbro and cable programmer Discovery Communications are teaming up to launch a new children's entertainment network in 2010. The channel is slated to replace the little-watched Discovery Kids in some 60 million homes, will include programming from Discovery and outside producers, as well as from Hasbro brands like Romper Room, Tonka and My Little Pony. The network marks one of the more ambitious moves by a manufacturer and advertiser into TV entertainment. Under terms of the deal, Hasbro will pay Discovery $300 million in cash for a 50% share in the venture, while Discovery will contribute the U.S. operations of Discovery Kids. Hasbro also has agreed to pay the venture an additional $125 million in merchandising royalties from July 2009 to November 2013. For Hasbro, the deal is part of an effort to transform itself into an entertainment company at a time when toys increasingly compete for children's attention with videogames, the Web, movies and TV. The company has two films, "Transformers: Revenge of the Fallen" and "G.I. Joe: The Rise of Cobra," coming to theaters this summer. Robert Weissman, managing director of Commercial Alert, said that the new network "sounds like nothing more than a scheme to deliver program-length advertisements to children." Campaign for a Commercial-Free Childhood director Susan Linn said in a statement that the network "will make a mockery of existing ad limits."