His is an all-American toy story
Less than a couple of hours after a resounding defeat in federal court, Isaac Larian -- the blustery chief executive of MGA Entertainment Inc. -- sounded like a man getting into the ring, not one who had just gotten a legal beating.
“They are so dishonest,” he said of archrival Mattel Inc., which had just won a jury victory in a long-fought copyright infringement lawsuit that could cost MGA more than $1 billion.
“Their lawyers are dishonest,” said Larian, who sees the case as a vendetta by Mattel against him.
It wasn’t an unexpected reaction from the feisty Larian, 54, who built his Van Nuys-based company into one of the major forces in the toy industry from a humble enterprise so shaky that it filed for bankruptcy protection in 1997.
That success was mostly built on one product -- the Bratz dolls that MGA debuted in 2001. Beloved by preteen girls, the hip dolls with tight outfits and bare midriffs that exuded street smarts (uncomfortably close to street walker, according to some angered parents) soon made MGA anywhere from $500 million to $2 billion a year, depending on which analyst was doing the estimating.
But July 17, after six weeks of testimony, the jury found that the Bratz dolls were created by a designer who had been working at Mattel under an exclusivity contract. The jury also found that MGA and Larian aided the breaking of that contract.
The battle, and courtroom fireworks the trial generated, are far from over. On Friday, during the damages phase of the trial, it was revealed that one of the jurors had made slurs about the ethnicity of Larian, who was born in Iran. The juror was removed and MGA asked for a mistrial to be declared. The matter will be taken up in court Aug. 4.
A mistrial would wipe out Mattel’s victory, justifying Larian’s refusal to enter settlement talks with Mattel.
“I need to sleep good at night,” he said. “I can’t be in bed with them.”
Strolling confidently through the courthouse hallways during breaks, Larian was always nattily dressed in well-tailored suits, and always willing to give a comment to reporters.
During noon breaks, he was often seen carrying a Trader Joe’s bag that didn’t go with the suits. As he entered the private sanctuary of his lawyers’ workroom one day he explained, “It’s my lunch. My wife is very good to me.”
In a recent interview, he traced his feistiness and devotion to family to his childhood.
“It goes back to my upbringing,” he said. “I grew up in Iran, being Jewish.”
His family was close and he learned the value of work from his parents, who owned a retail fabric store. “My parents were not wealthy,” he said, “and I had to work after school at the shop.”
Larian came to the U.S. in 1971 at the age of 17. He said he had only $750 and got a job as a dishwasher at Spires coffee shop in Lawndale.
“The first great meal I had in the U.S. was liver and onions at Spires,” he said.
He worked the night shift, eventually getting promoted to busboy and going to school during the day at Cal State Los Angeles as an engineering major. He planned on returning to Iran after graduating.
“The goal was to go back and get engineering work on the infrastructure,” Larian said.
But by the time he made it back to Iran in 1979, the revolution had created an Islamic republic.
“Being Jewish, I didn’t see that as a place where I could live,” Larian said. He headed back to the U.S. and with his brother, Farhad, began an import business called Surprise Gift Wagon. He never worked as an engineer.
“My kids ask about that,” Larian said. “I tell them, ‘In engineering they teach you how to solve problems and in business you have to solve problems every day.’ ”
They imported brass giftware and other items. In 1987 they formed a division called Micro Games of America (later MGA) to distribute a Nintendo hand-held game machine called the Game & Watch. It couldn’t hold more than one game at a time, and after an initial surge in sales, the U.S. venture faltered.
“I had so much inventory and nobody wanted to buy,” Larian said. “It was a disaster for me that taught me a big lesson. In the toy business, kids are always looking for fresh, new products.”
Nintendo debuted the legendary Game Boy in 1989, but the Larians didn’t get a piece of that. The brothers were also feuding over the operation of the business, and in 2000 Farhad sold his portion to Isaac for about $9 million.
Farhad later sued his brother, claiming that Isaac had hidden a $3-billion distribution deal from him that greatly enhanced the value of their company. The suit eventually was withdrawn.
Larian said the relationship between him and his brother is civil but not healed. To explain, he Americanized a Persian proverb: “They say if you drop and break an expensive vase, you can Crazy Glue it back together. But there is always a mark there.”
The court battle with Mattel is the biggest challenge yet to his business. But even in the midst of this trial, it’s clear that he enjoys looking back on what he sees as his all-American story.
“A few years ago I took my kids back to the coffee shop where I worked,” Larian said. “We sat down and ate.”
As far as he could tell, none of the people who had been there in his dishwashing and busboy days was still at the restaurant. But there was a reminder of those times.
“Liver and onions,” he said. “It was still on the menu.”
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Begin text of infobox
Playing for keeps
Who: Isaac Larian
Job: Chief executive of toy firm MGA Entertainment Inc.
Age: 54
Family: Married to Angela Larian and has three children
Award: Ernst & Young entrepreneur of the year in 2007, overall national winner
Hobbies: Bicycling, writing poetry, volleyball, yoga and camping
