Anime fans have long had disdain for 4Kids Entertainment and its head honcho, but they're not the only ones as the Hollywood Reporter has word that the deal the Japanese have had with the company for Yu-Gi-Oh! has been terminated and a multi-million dollar lawsuit has been opened against them.
"[T]he Japanese animation studio that first created the anime hits is attacking, claiming that 4Kids owes it millions of dollars for making secret agreements with TV networks and home video distributors as well as making improper royalty deductions, including for the cost of the actual dubbing. As the result of alleged contractual breaches, the Japanese companies behind the show reveal they have just terminated their licensing agreements with 4Kids. They now want past money owed too."
TV Tokyo and Nihon Ad Systems have failed their suit in New York's federal court system. The piece provides some interesting examples and highlight's FUNimation's apparent role in it as well as indicating that Cartoon Network and others were caught up in the questionable deals that 4Kids Entertainment made.
For example, 4Kids is said to have made an agreement with Funimation Productions, giving it the right to exploit the YGO series on home video. "4Kids conspired with Funimation to fraudulently hide from Plaintiffs more than 45% of the total income Funimation paid to 4Kids from the sale of the home videos," the complaint states.
Allegedly, 4Kids not only licensed YGO, but also several other Japanese animation series it didn't own. Under the terms of this supposedly secret deal, which allegedly included a strict confidentiality clause, 4Kids didn't have to do much besides perform certain marketing services. It was Funimation's job to produce and distribute the series, and for this right, Funimation paid a $1.3 million advance and gave over nearly $3 million in revenue, which was allegedly then hidden from the plaintiffs.
Attempts at getting things ironed out between the Japanese licensers and 4Kids did not go well when 4Kids abruptly terminated a meeting with them which had TV Tokyo and Nihon Ad Systems canceling the agreements that were in place and filing a $4+ million dollar lawsuit for breach of contract and damages.