US$250 million in debt, fear of bankruptcy, and known enemies

empire of dolls Funko POP! This building, which took ten and a half years to build, is about to collapse. In its most recent financial report, Funko acknowledged that it could be declared bankrupt and cease to exist within a year, according to the conclusion of its third quarter 2025 financial report.

of perfect stormThe numbers, which threaten to topple the bobblehead kingdom, include the scary red figure of about $250 million in debt.

“In connection with the preparation of the unaudited consolidated financial statements for the quarter ended September 30, 2025, management evaluated the Company’s expectations regarding its future liquidity, the anticipated impact of announced tariffs and other events and conditions, and its ability to comply with the terms of its credit agreement,” begins one of the most shocking sentences in the latest report filed with the U.S. Securities and Exchange Commission.

“Management has determined that there is material doubt as to the Company’s ability to continue as a going concern for the next 12 months from the date of issuance of the financial statements.”

They then warn that if you do not receive accommodations or additional financial assistance to renegotiate the debt, “we may have to do so.” Reducing or discontinuing part or all of our operations To reduce costs or benefit from protection, bankruptcy”.

That specter is what looms over its financial report, in which the company details a 14% decline in sales in the third quarter. Estimates put Funko’s total debt at $241 million.

It seems unbelievable. At the end of September, the company 1 Billion Funko POP! We have been selling them since the start of our activities.

But times are changing. The company warned that it would not be able to honor its debt payments and expressed concern that creditors could begin to honor the guarantees on these financial agreements. He also suggested that they may face difficulties in meeting expenses for day-to-day activities.

“Our board of directors has begun a formal review process to evaluate strategic alternatives for the company, including a potential sale,” they added in a report filed with U.S. authorities.

Although they assert that there is “no deadline or calendar set” for the company’s “review” process, the report makes clear that the next 12 months will be key.

In the third quarter of 2024, Funko generated sales of $292.8 million. A year later, that number had dropped to 251 million.

They attributed the decline to the tariff crisis and “general macroeconomic uncertainty.”

In the US, interest in the dolls collapsed, with sales plummeting 20.1%. On the other hand, sales in Europe remained stable (-0.4% year-on-year). However, the US trend was confirmed in other countries as well, with sales down 10.8%.

At least five keys explain the threat looming over Funko POP. According to official reports, the doll.

The company is currently considering rate hikes, interest rates and inflation trends.

This is one of the central keys and tools that President Trump has implemented in the United States’ trade relationship with other countries. Funko has factories in Vietnam, China, and Mexico. “The impact of recently implemented tariffs and the potential imposition of modified or additional tariffs or export controls by other countries will continue to adversely affect our future net sales, margins and profitability,” they said.

“We have been and continue to operate in a challenging retail environment as retailers delay replenishment, prioritize lower inventory levels, and in some cases cancel orders,” the company acknowledges as to why Funko POP! is spreading from below. It becomes a thing of the past.

The fourth, related to the decline in interest, is perhaps the most shocking. This has to do with a mismatch between the company’s regular license and new media. Shifting the consumer’s mind.

“As we move away from major movie franchises, we have seen consumer preferences increasingly focus on streaming and other digital media, where content is not produced by major movie studios,” Funko warns. They added: “If these trends continue, or if we are unable to license content that appeals to consumers, our results of operations could be adversely affected.”

brian mariotti He was the historic CEO of Funko. He left the company in 2023, but by then the company was already in dire straits and it was no longer a business to store the dolls while waiting for sales, so he fired 10 percent of his employees and destroyed the dolls.

After leaving Funko, Mariotti launched a twin venture. Thrill Joy Pix! These are dolls similar to the ones he helped install, targeting the hearts of nostalgic fans and collectors.

Funko’s official report states that “Brian Mariotti and other former Funko executives have formed a collectibles company and have recently launched certain products that compete with our products.”

“Mr. Mariotti was able to leverage the licensing, supplier, marketing and other relationships he established while at Funko to produce, market and sell products; he was able to sell competitive products at higher margins or at lower costs; and he was able to take advantage of demand for our products, particularly from our collector customers, all of which could adversely affect our sales and profitability in the future,” he concluded.

In June 2024, Mariotti warned, “What is Thrilljoy? Stay tuned for fan-driven pop culture presented in a whole new way!”