Frivolous lawsuits can really cost a company. No, I'm not talking about some angry consumer suing Mattel (NYSE:MAT) for some perceived wrongdoing. I'm talking about Mattel's long-running legal bullying on behalf of its best girl, Barbie.
Back in 1999, a fellow named Tom Forsythe decided to produce a photo series online that examined, criticized, and lampooned Barbie. The "Food Chain Barbie" series eventually included 78 images of Barbie, sometimes in sexually explicit poses, or stuffed unceremoniously into a tortilla, an oven, or a blender.
They were the kind of cutely subversive, marginally clever visual doodads that required an overly cerebral, postmodernist justification -- preferably crafted by a jaded art wonk smoking a very thin cigarette -- to rise to the level of Art.
That, or a very public lawsuit. In 1999, Mattel was only too happy to oblige. Never mind that Forsythe hadn't exactly been raking in the cash from this work. Never mind that this was a cut-and-dried case of freedom of expression. Mattel lost a series of judgments, but kept at it anyway, hoping to outspend Forsythe to silence him. Judge Ronald S. W. Lew said as much in his decision last week, awarding legal fees of $1.8 million to Forsythe.
This isn't the first time Mattel has taken a beating while trying to protect its No. 1 girl from criticism. The firm lost a similar, groundless complaint regarding the song "Barbie Girl" by Vivendi (NYSE:V) artist Aqua.
The problem for investors is that Mattel's overzealous loyalty to Barbie is costing them money. It's not just legal fees. A quick look at the firm's flagging sales and increasing costs shows that Mattel execs have stumbled at a time when Bratz-hawking Hasbro (NYSE:HAS) managed to eke out increased earnings despite the tough toy climate.
Yes, Mattel is in better shape than in the recent past, but at a time of record consumer spending, it could do better. Mattel might start by looking beyond Barbie and rediscovering a sense of humor.
For more Fool coverage of the toy biz:
- Alyce Lomax has issues with Mattel's girly grown-up strategy.
- Is Motley Fool Stock Advisor pick Hasbro a Has-Been?
- Take a look at what Hasbro is putting out.
Fool contributor and recovered art wonk Seth Jayson has stopped smoking thin cigarettes and playing with dolls. He has no position in any company mentioned. View his Fool profile here.
