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TV Tokyo, Nihon Ad Terminate Yu-Gi-Oh! Deal, Sue 4Kids


DJ FLiGHTS

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On March 24, TV Tokyo and Nihon Ad Systems filed a joint lawsuit against North American media distributor 4Kids Entertainment, accusing the company of "underpayments, wrongful deductions, and unmet obligations" and stating that 4Kids now owes the companies US$4,792,460.36. The Hollywood Reporter website also states that the two companies have terminated their deal with 4Kids.

According to the documents filed by the plaintiffs, the companies conducted an audit on 4Kids' Yu-Gi-Oh! business per their licensing agreement. This audit allegedly uncovered the aforementioned underpayments, as well as a "secret" agreement with Funimation, allowing them to "exploit" the Yu-Gi-Oh! franchise via home video and hide the added income from the plaintiffs. By hiding this income, TV Tokyo and Nihon Ad Systems allege that 4Kids was able to pay them a smaller share than would otherwise have been owed to them. The complaint further alleges that 4Kids attempted to hide the secret deal rather than disclosing it as required by their licensing agreement.

Funimation is not listed as a defendant in the complaint.

Update: According to TV Tokyo and Nihon Ad Systems, the terms of their agreement with 4Kids were such that they would be paid 50% of 4Kids' gross income derived from the Yu-Gi-Oh! franchise. The agreement also allowed 4Kids to enter into licensing agreements for the home video rights for the franchise, provided that they use "customary forms of license agreements."

The plaintiffs allege that 4Kids entered into an agreement with Funimation on March 1, 2002, which granted Funimation "broad right to exploit" the franchise and would pay 4Kids a royalty of 20% of its gross receipts. The plaintiffs then allege that on the same day, the two North American companies entered into a "secret" second agreement for Yu-Gi-Oh! and other titles, under which Funimation undertook the majority of the work releasing home video products and paid 4Kids a US$1.3 million advance and a "service fee" for each sale.

According to the complaint, this service fee added up to US$3.934 million and was not reported as income in 4Kids' quarterly reports. As such, the Japanese companies were not paid royalties from this "kick back."

The complaint further alleges that 4Kids entered into a similar deal with Majesco Entertainment to create Yu-Gi-Oh! videos to be played on Nintendo's Gameboy Advanced portable videogame console. Under this deal, 4Kids paid royalties on the US$366,667 advance paid by Majesco, but reported its $1 kick back per video sold as a service fee, not as income, and did not pay royalties on it.

Original Article

Sort of surprised by this, and would have went under my radar had I not randomly stumbled upon a comment regarding this. I'm sure no one saw this coming. Even for 4Kids, this is a shock. This trouble could mean a massive loss for the company, as well as someone else to pick up the dub. Is this a good or bad thing for the show? What other repercussions do you think will arise from this situation? What are your thoughts, Yu-Gi-Oh! fans?

(Mostly posting since I'm just secretly more happy about 4Kids getting in trouble for something. Teehee~)

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Heh, I'm kinda glad they're getting in trouble for something too. But on topic, I really am surprised at this. I wouldn't think a company like 4kids would do.....oh who am I kidding? It's the year 2011, everything a big company does anymore is for money and of course they'd try to keep as much for themselves as possible. Good for the Japanese companies that found out about this stuff. The only people I really feel sorry for are the voice actors, but even they can probably find some kind of work easier because of their talent. If TV Tokyo does decide to have a company show yugioh in america still (at least not reruns), I'd honestly like to see what the company does with it. Hopefully they won't make it a half hour long friendship speech with card games and keep it a little more true to the original.

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I don't mean to sound mean, but in all honesty, 4Kids losing the rights to a show can only mean good things for the show itself in terms of quality.

I will admit though, 4Kids were pretty good at hyping shows up to young children. So whilst it's undoubtedly a good thing for the show itself and its fanbase, it might not be such a good thing for the commercial success of the series in the West (well, especially if another company doesn't pick it up).

That said, from what I'd heard, Yu-Gi-Oh! GX and 5D's haven't been doing particularly well in the US and UK anyway? I always figured it was the original series which was the most popular and successful, and that's long since finished.

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I may be flamed after saying this but:

I'm so glad.

Hopefully they won't make it a half hour long friendship speech with card games and keep it a little more true to the original.

^This

Perhaps it'll be good for the show as 4kids crippled it way too much. The only thing they were missing in the dub was saying that global warming could be solved through the power of friendship.

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I can't see this as a good thing at all for the YugiOh series, not only is 4Kids in bad standing with the creators but also Funimation(one of the only major distributors of anime to the West). With TV Tokyo most likely feeling betrayed and jaded by western companies it's gonna be very difficult for western fans to legally purchase/stream the anime now.

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Serves 4kids right. Time and time again has Kahn made it out that the only reason why they localise anime is to make loads of money off the back of merchandising. Clearly it doesn't matter about the quality of the dubbed material as long as they can make a buck off the back of it. Seems like their greed in that respect has come back to bite them in the ass.

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Ah-ha, oh WOW.

I know 4Kids were a bunch of money-grubbing assholes, but the fact that they were going behind their business partners' backs? Bit them in the ass big time. And since 4Kids are pretty much dying, this couldn't come at a worse time for them. Taking Yu-Gi-Oh away from them is a huge blow that could potentially be their death knell, but if they lose the suit, they also lose whatever reputation they still have, considering Toei already shat on it after they realized how they managed to seriously screw up with One Piece.

Oh, yeah, Yu-Gi-Oh is out of 4Kids' hands. AWESOME.

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I have nothing but the utmost indifference to this predicament and everyone else should too. It's not like 4Kids licenses anything worthwhile these days, and nobody gives a shit about Yu-Gi-Oh! the show.

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I hope a good company like Bandai or Funi gets the show. 4kids really butchered it, and an uncut release without dub names would be nice.

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Oh I agree Sean, I haven't watched an episode of YGO in 10 years and the sooner 4kids is dead and 4gotten the better. I'm really more concerned with how this might affect independent content based on the series, i.e. the YugiOh Abridged Series. I'm not exactly sure of what legal position the YAS creators have with 4kids/TV Tokyo considering their videos are constantly removed from Youtube and other sites, but if TV Tokyo discontinues all rights to distribute the series in West they may start cracking down on them harder than before.

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Oh I agree Sean, I haven't watched an episode of YGO in 10 years and the sooner 4kids is dead and 4gotten the better. I'm really more concerned with how this might affect independent content based on the series, i.e. the YugiOh Abridged Series. I'm not exactly sure of what legal position the YAS creators have with 4kids/TV Tokyo considering their videos are constantly removed from Youtube and other sites, but if TV Tokyo discontinues all rights to distribute the series in West they may start cracking down on them harder than before.

I was going to bring up the actually still-going-strong card game but then I realised it's legally independent, so nevermind.

For the record, currently Yu-Gi-Oh! Abridged is routinely taken down by overzealous flagbots (there seem to be a lot of those lately) and is not actually in bad standing with 4Kids. Hell, YGO:A actually has a Japanese audience you don't hear much from.

There are always other ways to host video content, and YGO:A and all other Abridged material fall under fair use parody, so it's not that big a problem.

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I hope you people who are acting like this is the best thing to ever happen to the Yu-Gi-Oh licence realize that no company is going to touch it with a ten foot pole now.

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I find this ironic as 5ds has ended in Japan and this happened.

But I'm glad that 4kids is finally got what was coming to them. They've been doing shit for too long now and they really are getting it now.

I'm a tad surprised they kept a lot of the original names in some of these shows namely 5ds. They didn't go with that Meklord bullshit on the Machine Emperors that was going on recently but I'm rambling on aren't I?

I have nothing but the utmost indifference to this predicament and everyone else should too. It's not like 4Kids licenses anything worthwhile these days, and nobody gives a shit about Yu-Gi-Oh! the show.

I do though. :(

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I'd just like to point out to the "hurr 4kids make shit dubs they deserve this yay" people that a lot of people who did nothing wrong could presumebly lose their jobs as a result of the company getting sued. 8I

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I hope you people who are acting like this is the best thing to ever happen to the Yu-Gi-Oh licence realize that no company is going to touch it with a ten foot pole now.

Now why would you say that?

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It should be pointed out that after the utter disaster that was 4Kids version of "One Piece", they didn't really bother with picking up more anime and instead stuck to just Yu-Gi-Oh, TMNT and original shows. Though UKers wouldn't really be aware of that because the likes of Huntik, Chaotic and Magi-nation never really took off here.

4Kids had actually been doing a lot to try and turn a new leaf, at least in the states. They started streaming shows on Youtube, Hulu and their own site to complement their US Saturday Morning Kids block. They even uploaded subbed versions of Sonic X AND Yu-Gi-Oh recently. So it's a bit of a bitter blow to have this come down on the company right when their worst influence has done a runner. Kahn likely knew this was gonna go down which is why he bailed ship at the start of the year. While we hated what 4Kids had become, thats not what they are now (though sadly they are tarred with a pretty bad brush now)

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While I haven't been interested in any 4Kids property since the first Yu-Gi-Oh! series (I sort of follow One Piece, but I only got into that well after the 4Kids dub fiasco was old news), this is still sort of interesting to me. That's partly out of nostalgia, I'm sure, but partly because I have no idea how much power the Yu-Gi-Oh! brand holds anymore or what sort of audience the recent shows have been getting. I'm consistently surprised when I see promos for the series or see it being discussed online.

I have to admit, though, it would've been amusing to see 4Kids rise from the ashes and become a respectable company again, and it doesn't look like that could possibly happen now. Sort of a pity.

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I'll never forgive them for "Zolo." >_>

Really? I'm dying to know what your reaction to the poison suction cups was.

Edited by Balding Spider
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Because the anime arm of the Yu-Gi-Oh franchise hasn't been particularly popular for several years now.

Not surprising, considering 4Kids managed to drive One Piece right into the ground, which pissed off Toei enough to tear the license away from them and take a huge dump on their reputation.

Because the lawsuit specifically names the only other studio that would presumably take over the show if 4kids was to lose it normally.

To be fair, Funi probably had absolutely no knowledge of 4Kids' deal with Tv Tokyo and Nihon. Funimation is not listed as a defendant, so it's likely that they're probably innocent in this whole debacle, and they've got a far better reputation than 4Kids have had over the last several years, including actually turning things around for the One Piece franchise in the west after 4Kids, as I said, drove it into the ground.

(For the most part, anyway - the anime's television broadcast in the US and Canada was killed off thanks to Cartoon Network, who pretty much demanded that they turn the previous dub's failure into an instant smash success, all while keeping continuity with the 4Kids dub. For reasons known only to network management, the series was pulled amidst steadily improving ratings, to be replaced by shows no one watched. Thankfully, western viewers can still see the anime on the internet, thanks to Funi and Toei.)

Because, depending on how much this gets splashed around on anime news sites, it isn't going to do the "brand" any favors.

True, but only to an extent - most anime fans are rejoicing that 4Kids have lost the brand, and this is gonna affect 4Kids far more than the brand itself, because they're the ones who fouled up, and it bit them in the ass, big time.

Edited by Masaru Daimon
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Not surprising, considering 4Kids managed to drive One Piece right into the ground, which pissed off Toei enough to tear the license away from them and take a huge dump on their reputation.

Different situation, different result. 4Kids didn't do anything near the level of what they did with One Piece, so the situation isn't really comparable in the first place.

But regardless, Yu-Gi-Oh has faded naturally in popularity over the past few years, much like the Pokemon anime did before it (at least before Cartoon Network picked it up), and that isn't really that surprising. It was always passing fad show, and kids grew out of it. The dub certainly wasn't particularly good most of the time, but it is pretty doubtful that it had that much of an effect on the popularity of the show because it was never usually that bad. Really, it is a licence that has run its course, more or less, and 4Kids more dedication towards it was really the only reason the show had the presence it had anymore. Taking that away and simply assuming another company will step up to take it over is a bit of a folly, I suspect.

To be fair, Funi probably had absolutely no knowledge of 4Kids' deal with Tv Tokyo and Nihon. Funimation is not listed as a defendant, so it's likely that they're probably innocent in this whole debacle, and they've got a far better reputation than 4Kids have had over the last several years, including actually turning things around for the One Piece franchise in the west after 4Kids, as I said, drove it into the ground.

All of this is true. At the same time, do you expect TV Tokyo to turn around and sell the rights to Funi when this supposed conspiracy between 4Kids and Funi is the reason they are suing in the first place?

True, but only to an extent - most anime fans are rejoicing that 4Kids have lost the brand, and this is gonna affect 4Kids far more than the brand itself, because they're the ones who fouled up, and it bit them in the ass, big time.

I honestly have to imagine that most general anime fans don't care (outside of getting another chance to paint 4Kids as Captain Planet-style supervillians), and the only ones (for the most part) who do will be the ones who will turn on their TVs Saturday morning and wonder where Yu-Gi-Oh went.

Edited by Tornado
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