4Kids Settles FOX Litigation

November 10, 2008 World Screen

NEW
YORK, November 10: Reporting higher revenues for the third quarter, 4Kids
Entertainment also announced the settlement of its litigation with FOX, with a
deal that sees the run of 4Kids TV on
the broadcast network ending at the end of this year.

Earlier
this year, 4Kids launched a competing block on The CW, replacing Kids' WB! The initial deal with FOX had 4Kids TV continuing on till September
2009. Instead, FOX will cease carrying the block on December 31, 2008. "Our remaining financial
obligations to FOX for the first three quarters of 2009 will also
terminate," said Al Kahn, the chairman and CEO of 4Kids. "We believe
that the settlement is favorable for both companies and enables 4Kids,
beginning in early 2009, to focus resources on our five-hour block of children’s
Saturday morning television on The CW Network."

It
is not yet clear what FOX will do with that four-hour Saturday morning block.

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In
financial news at 4Kids, revenues for the third quarter were up to $17.8
million from $12.2 million, with $7.3 million coming from the sale of Chaotic trading cards across the U.S.
and Canada. 4Kids posted a loss for the period of $5.3 million as compared to
the year-ago period's $4.2 million. This rise was attributed to an increase in
expenses and lower licensing and broadcast revenues.

“In
the third quarter of 2008, we experienced strong year-over-year revenue growth
of 46 percent, which is attributable to sales of the Chaotic trading cards," said Kahn. "With the excitement
surrounding Chaotic, we remain on
track to meet our previously announced financial targets of $20-$30 million in Chaotic trading-card sales for
2008."

Kahn
continued: "Although we are continuing to invest significantly in content
creation and our digital platforms, 4Kids.tv and Chaoticgame.com, we currently
expect to return to profitability in the fourth quarter of this year. We are
hopeful that some of our newer properties, including Dinosaur King, RollBots
and GoGoRiki will help strengthen our
licensing business in 2009 and that the momentum behind Chaotic will continue."

—By Mansha Daswani