The rumors have turned out to be true, courtesy of Variety and Yahoo!

There's still life in the animated laffer "Family Guy," which has officially gone back into production -- two years after being canceled by Fox.

20th Century Fox TV will produce at least 22 new episodes of the series, although the studio expects that number to eventually go as high as 40. Cartoon Network has signed on to air the new episodes, which will premiere in early 2005 -- although Fox can exercise an option to broadcast the segs first.

"There was never any question that this show was wildly successful creatively, but it didn't draw a broad enough audience to justify sticking on the network," 20th Century Fox TV prexy Gary Newman said. "But we've found a way to capitalize on the incredibly loyal and fanatical base of enthusiasts for the show."

The announcement has been a year in the making. Studio execs first broached the idea of reviving "Family Guy" last spring after sales of the show's first DVD collection went through the roof ( Daily Variety, May 29). Additionally, repeats of "Family Guy" running on Cartoon Network's "Adult Swim" block quickly became one of the net's top-rated programs.

"It's really astonishing," "Family Guy" creator/exec producer Seth MacFarlane said. "We all kind of mused when it was canceled that it would be funny to have a fate like 'Star Trek,' where you go three years, get canceled and then explode in reruns. We never thought that would happen, but then, here we are."

It's actually the third wind for the series. "Family Guy" bowed to strong numbers in 1999, but the show's ratings cooled after it was moved to Thursday night in its second season. The laffer was canceled but quickly revived as Fox Entertainment prexy Gail Berman's first executive decision when she joined the network.

But after its third season didn't make waves, "Family Guy" was axed for a second time in 2001.

Then came the slot on Cartoon Network's "Adult Swim" and the DVD. According to 20th Century Fox Home Entertainment, more than 2.2 million units have been sold of "Family Guy's" two DVD volumes.

"This is one of the more interesting stories of the DVD era," said Steve Feldstein, senior VP at the division. "We're hearing so much about the significant impact of the DVD on the bottom line of Hollywood -- here's an instance where it impacted creatively as well. This was a tremendous asset that was lying dormant."

According to Newman, the Cartoon Network license fee and expected DVD sales will help cover the cost of resuscitating "Family Guy." Also, the studio expects to now reach 85 to 100 episodes of the show, enough for off-net broadcast syndication.

"Whether or not the show a few years from now will be available for syndication remains to be seen," Newman said. "But if it is, then we have a situation where we managed to take a busted series and turn it into a real asset."

In order to justify the show's return, Newman said the show's budget has been cut by about 10%. But MacFarlane said the belt-tightening won't have a major impact on the show.

"Family Guy" revolves around absent-minded dad Peter Griffin and his brood, who live in the quirky town of Quahog, R.I. Action revolves around Peter and his devoted wife Lois, daughter Meg, slacker son Chris, baby Stewie (the homicidal tot bent on world domination) and well-spoken family pet Brian, who prefers cocktails to puppy chow.

The show has scored two Emmy Awards: One in 2000 for outstanding voice-over performance (MacFarlane) and one in 2002 for outstanding music & lyrics (MacFarlane and Walter Murphy). "Family Guy" was also nominated for outstanding animated series in 2000.

MacFarlane voices several of the show's characters, including Peter; the show's other voice actors (including Seth Green (news), Alex Bornstein and Mila Kunis (news)) are in talks to return.

MacFarlane said he will divide his time on "Family Guy" and "American Dad," the animated project he's exec producing and writing with Mike Barker and Matt Weitzman for Fox. The pilot for "Dad" is being animated.

Despite the "Family Guy's" resurrection, Newman said it's unlikely other canceled shows will experience a similar fate.

"In no way should anyone think this is a template for the future," he said. "A successful DVD life does not justify production costs. What it does suggest is those of us on the supplier side of the business have to be open to unique shows and situations."