King World Prods. is developing a remake of “The Little Rascals” shorts as the first project of its newly formed kids TV division.

Additionally, King World reported Tuesday a 4% higher profit of $36.6 million on slightly lower revenue of $175.1 million for the second quarter, which ended Feb. 28. The syndie also announced a special dividend of $2 a share, costing a total of $75.6 million, and a new stock buyback program.

Leading the effort to update kids series “The Little Rascals” are Vanessa Coffey and Jim Ballantine of “Ren & Stimpy,” who have signed an exclusive development and production deal with the syndicator.

A half-hour pilot will be shot this year, and King World may seek a network berth or launch the show in syndication in 1998. The TV remake follows a 1994 feature film version of “The Little Rascals” produced by King World CEO Michael King with Amblin and Universal.

“We want to find a way to revitalize it and bring these fabulous characters (Spanky, Alfalfa, Stymie) back to TV,” said Steven Nalevansky, senior vice president of programming and production for King World.

Meanwhile, news of the special dividend helped push King World stock up 62¢ to $36.87 Tuesday. King World has plenty of cash to fund the dividend: despite the uninspiring performance in the quarter, King World’s cash pile grew $33 million to $716 million by the end of February.

CEO King said, “We believe this is the right time to reward our shareholders for their confidence and patience.” The King family, of course, will be the biggest winners from the payout, receiving $17.5 million from its 23% stake in the company.

The company’s new stock buyback program was authorized following the completion of a four-year buyback program under which 2 million shares were bought back for $71 million.

The syndie said its second-quarter revenue was helped by higher cash license fees for “The Oprah Winfrey Show,’ “Wheel of Fortune” and “Jeopardy,” but these increases were offset by lower revenues from the sale of retained advertising time on “Inside Edition,” “American Journal” and “Rolonda” and by lower revenues from King World Direct, the company’s direct marketing biz.

“Significantly lower operating costs” at King World Direct helped the company report slight earnings growth, it said.

Separately, King World has filed suit against Sony seeking rights to launch a remake of “Hollywood Squares” in 1998. Sony has blocked such efforts in the past, claiming King World’s deal to distribute Sony’s “Wheel of Fortune” and “Jeopardy” precludes King World from producing and distributing a new gameshow on its own.

King World also said Tuesday that “Wheel” and “Jeopardy” have been renewed through 2002 on 70 stations reaching 70% of the country, including all top-25 markets

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