Mattel walked back pledge to donate millions to UCLA children's hospital, lawsuit claims
Mattel, the toy company that owns huge franchises like Hot Wheels and Barbie, is facing a new lawsuit brought by UCLA and its health system, claiming the company failed to make good on a pledge to donate $50 million to the university's children's hospital.
The company had pledged and completed large donations to the UCLA children's hospital before. Mattel formed a partnership with the university in 1998 and, in exchange for the hospital bearing Mattel's name per the terms of an agreement, donated $25 million to the hospital over a period of time, according to the complaint filed Nov. 19 in Los Angeles and obtained Wednesday by CBS News.
Mattel and UCLA entered into another, similar agreement in 2017, the lawsuit says. The toy company pledged to donate $49 million to the children's hospital in installments over a 12-year period, while the hospital rebranded to add Mattel's name into its own, which since then has been called the UCLA Mattel Children's Hospital.
Along with the update to its name, UCLA also began to incorporate Mattel's corporate logo into its signage. Both changes came in the wake of, and hinged on, the company's agreement "to give $50 million to The Regents, on behalf of UCLA Health, and the UCLA Foundation for the UCLA Mattel Children's Hospital to expand pediatric care and improve care for, and the health of, children across the globe," according to the suit.
But the complaint alleges that Mattel, citing financial issues, later walked back its pledge. Although UCLA Health at first agreed to suspend the company's payments temporarily in 2018, the suit also says Mattel never ended up giving the donations agreed upon in 2017 to the children's hospital — even after it reported a net income of more than $900 million in 2021, according to UCLA Health, and profits skyrocketed with the "Barbie" movie's record-breaking box office numbers earlier this year.
"Despite months of entreaties and alternative proposals, Mattel has refused to honor its promise, offering instead to make an in-kind contribution (e.g., Barbie dolls and Hot Wheels) and small (by Mattel's standards and in comparison to its 2017 contractual pledge) monetary donations rather than the contracted-for funds necessary to provide care and advanced medical research," the lawsuit says.
The suit is seeking the full donation amount from Mattel that the company initially pledged, accusing it of breaching their contract, plus additional damages determined during a trial.
"As a last resort, UCLA Health has taken legal action to compel Mattel, Inc. to honor its $49 million pledge under a 2017 contractual agreement," said a UCLA Health spokesperson in a statement to CBS News about the lawsuit. "Litigation is not the University's preferred path. UCLA Health made multiple good-faith attempts to resolve this matter through meaningful dialogue, and those efforts were unsuccessful."
A spokesperson for Mattel said in a statement to CBS News on Wednesday that the company "deeply values its longstanding relationship with UCLA Health" and references a clause in the 2017 agreement that apparently directed all of the multi-million dollar pledge toward the construction of a new tower at the children's hospital and limited its use otherwise.
"Our agreement expressly allocates funds for the new tower and provides that funding cannot be allocated for any other purpose by either party alone," the spokesperson said in the statement. "UCLA Health has unilaterally abandoned its plans for the construction of its new hospital tower. As a result, the conditions for the pledge under the 2017 Agreement have not been met."
"Mattel has continued to enthusiastically support UMCH's ongoing activities including fundraising, toy, cash and in-kind donations, and community activations," the statement continued, adding that supporting "current pediatric activities" at the hospital is important to the company.