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Published:June 2nd, 2008 15:20 EST
The Madness of Mattel

The Madness of Mattel

By Nancy Lee Wolfe (HR Development/Content Manager)

A few days ago, Mark Lacter took a look at Mattel`s legal fees.  It`s easy to see why "Mattel executives clearly don`t want to talk about their higher legal costs."  When, in one quarter, legal fighting drains more than $18 million from the bottom line, throats get dry.

 

You see, when former US Patent and Trademark Office lawyer Don Aiken joined Mattel, litigation knocked Barbie from her throne.

 

Take, for example, Mattel`s law suit against MGA Entertainment and the employee who designed the Bratz doll.  After enough legal tender flowed from Mattel`s ledgers, they settled with the employee.  The insanity will continue, though, because Mattel vows to continue its fight with MGA.  More legal tender.

 

Furthermore, in what seems a conscious effort to dismantle Mattel, Legal Man Aiken has waged a 4-year assault against Super Duper Publications, Inc. claiming this American family-owned creator, producer and distributor of teaching tools for autistic and special needs children cannot use the word "say."  See, Mattel claims to own the word "say."  Or, does Legal Man Don Aiken own it?

 

Say, Don, are you aware that, decades ago, Milton Bradley, now Hasbro, manufactured a game called "See and Say"?  We include the picture for your edification.  Have you done your homework, Don?

 

Regardless, some speculate that CEO Eckert is heading for the door.  If the dumping of 1 million Mattel shares doesn`t strikes a nerve, how does it strike you that he dumped these 1 million Mattel shares within the last two weeks of the first quarter?  Matt Andrejczak covers the transaction very nicely for Marketwatch.com, Mattel CEO sells stock in nick of time. 

 

If Legal Man Aiken has created doubt for CEO Eckert, what is CFO Kevin Farr thinking?  Does he have an inside scoop, or is he totally insane?  When asked by Wachovia analyst Tim Condor about Mattel`s staggering legal expenses, CFO Farr actually said, "I think what we are doing is we are making investments and legal expenses and we`ll make the appropriate investments as these legal matters progress through the year."  [Mattel`s legal fees]

 

Legal expenses as investment?  Perhaps the Madness of Mattel can be found in their ill-conceived strategy to bury smaller businesses beneath legal expenses and, because Mattel`s pockets are deeper, survive bleeding money long enough to conquer.  Farr and Aiken likely prefer this to research and product development.

 

Collateral damage continues, however.  Mattel, are you looking?  In addition to outraged business owners and others, Mattel is being boycotted by moms.  Stockholders must be so delighted-- of course, they were not allowed to mention it at Mattel`s annual meeting Friday.  CEO Eckert killed commentary just before he announced no audio recording of the meeting would be made available.

 

Only a well-planned intervention can save Mattel from this madness, but the meter and the market are running.

 

[See  Say, what will Mattel tell stockholders today?, Mattel, can you SAY Megalomaniac?, and My Autistic Boy and Other Adventures in Fatherhood, "Mattel Versus Super Duper," www.autisticdad.blog.com/3120849.]