Suit: Barbie Maker Reneged on Promise of Big Donation

The UCLA Mattel Children's Hospital bears the name of the company that donated $25 million to support the hospital's construction in 1998. But Mattel and the UCLA Foundation are now at odds over what the latter claims is the toymaker's decision to renege on a much larger donation. The University of California and UCLA Foundation are suing the Barbie brand over what it says is the company's "inexplicable decision" to walk away from its 2017 pledge to donate $49 million in cash over the next 12 years, thereby violating its contractual obligations, the Los Angeles Times reports. UCLA Health claims it chose litigation after two years of "good-faith attempts to resolve this matter through meaningful dialogue." Mattel counters that UCLA violated the contract first.

Mattel's donation was meant to support construction of a new hospital tower, but UCLA "unilaterally abandoned its plans for the construction," the company says, per the Wrap. "As a result, the conditions for the pledge under the 2017 Agreement have not been met." UCLA says Mattel is just coming up with excuses. It claims the toymaker donated $2 million as promised in 2017, but just $1 million of the $3 million it had promised in 2018. It's apparently given no money since. Mattel entered a three-year pause on donations in 2018 after losing $1 billion the previous year, per the Times. But when that pause ended, the company told UCLA it would donate just $10 million total, with only $2.5 million coming in cash. It offered $5 million in marketing and $2.5 million in toys, according to the suit.

At that time, Mattel argued UCLA wasn't holding up its end of the deal. Specifically, Mattel claimed UCLA had no construction plans for the tower and hadn't launched international health initiatives as outlined. But UCLA says it was Mattel's decision to withdraw funding that jeopardized the tower's construction. Claiming the other arguments are meritless, it's requesting the full $49 million plus damages for "significant financial injury." In its statement, Mattel—which continues to hold annual fundraisers for the hospital, the last taking place only last week—says "we are open to continuing a dialogue with UCLA Health in the same spirit of collaboration that has been a hallmark of our relationship for decades." (More Mattel stories.)