Toy makers team with wrestling groups

Mattel Inc. and Jakks Pacific Inc. on Wednesday announced new deals to make wrestling action figures, the latest chapter in a story that has all the acrimony and shifting alliances of professional wrestling.

Mattel has teamed with World Wrestling Entertainment Inc. to make toys based on its popular wrestlers, and Jakks is matching up with WWE rival TNA Entertainment.

Both deals -- which take effect in 2010 -- are for five years. The companies, which expect the first products to come to market in 2010, did not disclose financial terms.

“While this news was not unexpected, it does come slightly earlier than anticipated and is a negative headline” for Jakks, Sterne Agee analyst Arvind Bhatia said.

Jakks holds the license to make WWE toys through next year, but its contract with the company will not be renewed because the partnership soured.

In December, a federal court dismissed a WWE lawsuit against Jakks, which accused the toy maker of bribery to win a lucrative licensing deal based on wrestling superstars.

“By the time 2010 arrives, TNA should be able to increase its market share even more significantly,” Jakks Chief Executive Jack Friedman said.

Mattel is adding the wrestling line to a stable of well-known brands, including Barbie, Hot Wheels and TMX Elmo. Despite last year’s recall of millions of Mattel toys made in China because of safety concerns and lead paint, WWE was “comfortable” with Mattel’s response to the problem, said Donna Goldsmith, WWE’s executive vice president of consumer products.

Mattel, the largest U.S. toy maker, will make WWE-themed action figures, games and puzzles, plush toys and remote-controlled vehicles.