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4Kids to End Its Fox Programming Block in December

In its financial statement for the third quarter of 2008 which ran from July 1 to September 30, 4Kids Entertainment has revealed on Monday that it will end its programming on the Fox Network at the end of this year. The current seventh season of 4Kids TV's Saturday morning block on FOX includes episodes of Kirby: Right Back At Ya! and Sonic X. FOX had originally scheduled the block to run through September of next year. To back out of the contract, 4Kids had to settle with FOX for an undisclosed amount.

The relationship between 4Kids and FOX started in 2002, when the block launched under the name FoxBox. The block has aired numerous anime, including One Piece, Shaman King, and Tokyo Mew Mew. Last year, 4Kids signed a similar agreement with The CW Network to run original and licensed cartoons over a five-hour Saturday morning block and sell ads to be aired during that time. According to 4Kids CEO Alfred E. Kahn, the dissolution of the FOX contract will allow 4Kids "to focus resources" on its CW programming going into 2009.

4Kids' quarterly results included an increase in net revenues to US$17.8 million, compared to US$12.2 million over the same term last year. About US$7.3 million of the new revenue came from sales of the Chaotic trading card game. However, 4Kids still experienced a net loss of US$5.3 million (compared to US$4.2 million last year).

For the year to date, net revenues were US$49.4 million, up from US$39.1 million, but net losses have also increased. In the first nine months of 2007, 4Kids lost US$6.6 million; this year, that figure was up to US$17.2 million. Kahn attributed this to "the increase in selling, general, and administrative expenses and cost of goods sold in the Trading Card and Game Distribution Segment of our business, coupled with decreased licensing and broadcast revenues." However, he said he was confident that in the last quarter of the year, the company will return to profitability, and that the outlook for 2009 will be positive as sales and licensing revenue related to Chaotic, Dinosaur King, and other 4Kids series continue to increase. 4Kids also renegotiated the terms of "representation agreement" for the Yu-Gi-Oh! franchise, and now holds the licensing, broadcast, and merchandise rights to it through 2015.