American Greetings Invests in Children's Entertainment Company

Posted on January 3, 2005

American Greetings Corporation, a manufacturer of social expression products, has acquired a stake in The Hatchery, LLC, which develops and produces original family and children's entertainment. American Greetings, creator of properties including Strawberry Shortcake and the Care Bears, will become a co-owner in the Los Angeles-based entertainment production and marketing company headed by television industry executive Margaret Loesch and strategic marketing executive Bruce Stein. The announcement was made jointly by Jeffrey Weiss, President and Chief Operating Officer of American Greetings Corporation, and Ms. Loesch and Mr. Stein, Managing Partners of The Hatchery. Under the new partnership Ms. Loesch and Mr. Stein will be Co-Chief Executive Officers.

"This is an exciting opportunity to expand our all-family reach at American Greetings and to optimize our expertise in character development, retail merchandising and ability to reach customers on a variety of electronic platforms," said Mr. Weiss. "In The Hatchery we're adding a full-fledged entertainment production and development component to our company. Margaret and Bruce are exceptional creative and consumer marketing executives. By combining our vast resources, we're creating a business that will enable us to maximize our many existing creative properties and will provide unique access to new properties to exploit."

The new partnership, which will continue to operate as The Hatchery, LLC, combines American Greetings' catalog of intellectual properties, creative resources and retail relationships with The Hatchery's franchises in family and children's entertainment and consumer products. Among American Greetings' most current creative properties are the popular Twisted Whiskers and the upcoming Maryoku Yummy franchises. In addition, American Greetings provides consumer reach for The Hatchery's entertainment and branded projects through its 600 owned shops and 35,000 retail card departments. American Greetings' consumer reach also extends into interactive mediums with more than two million, paying subscribers to its websites: AmericanGreetings.com, Blue Mountain, EGreetings and Beatgreets.

Since launching in April 2003, The Hatchery has acquired more than 20 franchise properties, produced and released television and feature film projects and partnered in patented consumer products. Among their completed and in-production projects are the feature film Benji: Off the Leash, the television comedy game show Balderdash and the Canadian-produced action-adventure series Young Blades and a CGI educational series Zula Patrol. Projects in various stages of development include feature films based on The Great Brain and the award-winning short film The Freak; the Sammy Keyes series of children's books; Blast Off Boy (in partnership with Jane Startz), a series of critically-acclaimed, Newberry Award-winning children's books; and a series of video feature films based on the best-selling horror anthologies Nightmare Hour and The Haunting Hour from bestselling author R.L. Stine (Goosebumps).

Mandalay Entertainment is the founding investor of and a co-owner in The Hatchery. Its Chairman, Peter Guber, and Vice Chairman, Paul Schaeffer, are Hatchery board members and serve on the company's Operating Committee. Emmy and Peabody Award-winning writer and producer Dan Angel is also a partner with Ms. Loesch and Mr. Stein in The Hatchery, LLC.