Mattel, the corporate behind Scorching Wheels, Fisher-Value and Barbie, pledged in 2017 to donate $49 million to UCLA to help its kids’s hospital. However now the hospital says Mattel by no means got here by way of with the cash.
Based on a brand new lawsuit, the El Segundo toy firm made “the inexplicable choice a couple of quick years later to renege on that pledge” and is now attempting to supply the pediatric hospital just some million {dollars}, plus a bunch of Barbie dolls, Scorching Wheels automobiles and different in-kind donations.
The swimsuit, filed final week on behalf of the regents of the College of California and the UCLA Basis, accuses Mattel of breach of contract for going again on its giving pledge and is in search of the complete quantity of the unique pledge, plus damages for alleged monetary problem stemming from the corporate’s choice to again out of its giving plan.
“As a final resort, UCLA Well being has taken authorized motion to compel Mattel Inc. to honor its $49 million pledge,” UCLA Well being spokesperson Phil Hampton wrote in an announcement. “Litigation just isn’t the College’s most well-liked path. UCLA Well being made a number of good-faith makes an attempt to resolve this matter by way of significant dialogue, and people efforts have been unsuccessful.”
“We’re hopeful that another decision may be discovered by way of dialogue grounded in respect for a relationship of greater than 25 years and in pursuit of a shared curiosity: the care and well-being of kids,” Hampton added.
Mattel, in an announcement, disputed UCLA’s declare that it had breached its contractual obligations.
“Mattel deeply values its longstanding relationship with UCLA Well being and we’re proud that UCLA Mattel Kids’s Hospital bears our firm’s identify,” Mattel spokesperson Catherine Frymark wrote. However the firm mentioned that its donation was meant particularly for the development of a brand new tower within the kids’s hospital, and argued that as a result of UCLA “unilaterally deserted its plans for the development of its new hospital tower,” the situations of the 2017 pledge haven’t been met.
“We’re open to persevering with a dialogue with UCLA Well being in the identical spirit of collaboration that has been a trademark of our relationship for many years,” the assertion says.
The connection between Mattel and UCLA’s medical arm started in 1998, when the toy firm pledged to donate $25 million to the UCLA Basis to help the development of a kids’s hospital on the Westwood campus. In change, the college agreed to call the brand new hospital after Mattel, and 1000’s of kids have been handled at UCLA Mattel Kids’s Hospital over the a long time since. That deal proceeded easily, with Mattel delivering the funds as agreed by 2004, and the corporate has continued to host an annual Celebration on the Pier fundraiser for the hospital on the Santa Monica Pier, which the submitting notes raised over $1 million in 2022.
In 2017, Mattel made one other huge pledge to the hospital, promising to donate $49 million in money over the subsequent 12 years. In change, UCLA agreed to work Mattel’s brand into the brand and signage for the hospital. Because the submitting notes, this was an unprecedented act of company branding for a UC facility.
The 2017 pledge started with Mattel donating the $2 million it had promised within the first yr of the deal. Only one yr later, nevertheless, issues began to go sideways. In 2018, “Mattel paid simply $1 million of the $3 million promised” within the pledge settlement, in accordance with the submitting.
“That $1 million cost was the final one Mattel made,” the submitting states.
Mattel Chief Govt Ynon Kreiz knowledgeable UCLA in writing that yr that the corporate’s board had determined to place a three-year pause on donations, given the corporate’s unhealthy monetary place. In 2017, the corporate had posted greater than $1 billion in losses.
However three years later, in 2021, when the donations have been speculated to resume, Mattel wrote to the regents to say the corporate deliberate to donate solely $10 million extra in whole, moderately than the $46 million it had initially pledged. Of that $10 million, the corporate additionally wrote that solely $2.5 million can be within the type of money. The remaining can be made up of $5 million of in-kind advertising and marketing and $2.5 million of toys.
Mattel’s choice to go away UCLA within the lurch coincides with a significant turnaround in its enterprise. Since 2021, the corporate has earned over $1.3 billion in revenue, in accordance with monetary paperwork, buoyed just lately by an anticipated take of $125 million from its share of the “Barbie” film gross sales. Flush with money, the agency has already spent $110 million on inventory buybacks this yr.
Mattel’s abrupt change in fact has prompted “vital monetary damage” to the kids’s hospital on quite a lot of fronts, the swimsuit alleges. In addition to dropping out on the promised money, the swimsuit argues that Mattel’s choice additionally has jeopardized the development of a brand new tower to accommodate extra pediatric well being companies by making financing the mission tougher, prompted the hospital to lose out on potential sponsorship offers with extra dependable donors and broken its fundraising capability writ massive by displaying few penalties come from failing to observe by way of on its guarantees to the establishment.
The toy firm, in accordance with the swimsuit, argued in 2021 that it was not obligated to satisfy most of its obligations as a result of UCLA wasn’t holding up its a part of the discount, and had not but made building plans for a brand new facility or launched worldwide well being initiatives as mentioned within the preliminary pledge settlement. UCLA argues within the swimsuit that these arguments are baseless and that Mattel was merely making excuses to drag out of the deal.
UCLA tried to barter with Mattel over the past two years, in accordance with the swimsuit, however was not glad with the outcomes. Regardless of the strain between the toy large and the college, the twenty fourth annual Mattel-sponsored Celebration on the Pier fundraiser for UCLA’s kids’s hospital went on as deliberate on Nov. 5, simply 4 days earlier than UCLA filed its swimsuit.
