[EVA] ADV Turns into something else.

[Harold Ancell]

At 10:46 PM 9/2/2009, Aaron Clark wrote:
>[...] I'd like to provide a synopsis.
>
>ADV Films has shut down in name only.  The company just transmogrified
>into a couple of new companies with some slight changes in autonomy.

ANN's news article added a link to the best short description
I've found of the changes, e.g. who got what:

http://www.videobusiness.com/article/CA6687136.html?nid=4756&source=link&rid=6139221

or http://tinyurl.com/lgeqrj

>Some company address, registration, branding, and billing changes. 
>Whoopty do.

Are you sure about addresses?  Getting out of one or more leases
might be an objective of this change---ADV has significantly
downsized---then again they might have already handled that
as this has been happening for some time, and sub-leasing is
always a possibility (especially if you have a long time to
arrange it; then again sub-letters might themselves fold in
the current environment).

New corporate registrations, and a change from a C corporation
(unlikely to be an S) to more flexible and better tax structure
(taxed as partnerships instead of the double taxation of C
corporations) LLCs.  If there are ever profits to take out of
these companies ^_^, the different tax structure will help,
plus it's a lot easier to arrange investment in an LLC since
a minority shareholder can put whatever contractual arrangements
they can negotiate into the Operating Agreement.

If A.D. Vision Inc. had instead been a LLC the Sojitz blowup
would have almost certainly destroyed it, if Sojitz's lawyers
were at all competent in setting up the investment.  Instead,
Sojitz had to set up the ARM unit to hold the rights to the
properties and of course will be writing off their 20% stake
in A.D. Vision, assuming they haven't already.

Converting A.D. Vision to an LLC back then would have almost
certainly had terrible tax consequences; they can effectively
do it now because A.D. Vision's (presumed) negative net worth
changes that sort of thing.

We don't know what will happen to the ADV marks; they are an
asset but if not secured by the senior secured lender will
probably have to stay behind along with diverse office furniture
and the other stuff that will be sold at auction and disbursed
to the creditors who come after the senior secured lender.

But it will be the same people managing the production and
shipping of product, accounts receivable and payable, etc. etc.
Perhaps new phone numbers but the same voices on them.

>I hope it means that ADV films will throw some work on their web sites and
>services my company's way again.  I'd like to be able to say I had them as
>a client.  Gives me more nerd cred.

That would be cool, but maybe this time those could be less ...
busy???  I haven't like recent iterations.

At 10:07 PM 9/2/2009, V V wrote:

>....is The Right Stuf International more of a distributor or a clearing house? You mentioned that TRSI would handle a liquidation like CPM/ADV

TRSI does a bunch of things:

They started out as a mail order house (did that to get a
wholesale discount on a telescope for personal use, as I recall,
and things just grew from that).

As an outgrowth of that, they've provided outsourcing services
for ... more than one anime company that didn't want to handle
shipping product to distributors, or, say, when VIZ accidently
swapped the stereo channels of their Ranma OAV box set, TRSI
handled the exchanges.

They pretty clearly have liquidated excess inventory in times
past, they are well set up to do that.

They have a unit named Nozomi that licenses, produces and
distributes a wide variety of anime titles, from early classics
(e.g. Astro Boy, Kimba) to various current titles including some
license rescues; the list is quite long:

http://www.animenewsnetwork.com/encyclopedia/company.php?id=1

or http://tinyurl.com/mgde2o

They seem to do a good job that and e.g. were chosen by the
rights holders of "Third: The Girl with the Blue Eye" to
produce and distribute it in the US.

In general they seem to be an all around quietly competent
company that will do odd jobs as needed and that has never
visibly overextended themselves.

>As I said, Media Blasters won't dominate.

Indeed, and they've been doing a lot of live action stuff.  I
will love them forever for rescuing the samurai epic Goyokin
from art house obscurity (Robert Woodhead (Mr. AnimEigo) really
wanted to get that title but somehow failed.)  

>Of the big 3, Bandai has all sorts of reports of layoffs and internal problems and frankly I wonder if their Japanese parent company will pull another Geneon and yank the plug on them.

This I doubt, at least in that manner, since Geneon's parent
company is an advertising company and this sort of thing isn't
their real business.  I suspect Bandai in the US will remain
as long as it's profitable and/or has potential to be profitable.

As long as Bandai believes they will continue to produce good
titles in Japan they'll want to get whatever they can from the
US market.  Japan's terminal demographic decline requires their
anime companies to get whatever profits they can from countries
and societies that are still reproducing....

(Note also that Japan, Inc. will soon be "under new management",
this is the first real and likely lasting loss for the LDP since
they came to power in the mid-1950s.)

>Problem is it seems like when the bubble burst in 2006 ...
>but the entire industry knows EXACTLY what went wrong:
>
>1-Geneon and ADV overspeculated to death, then the bubble burst

Maybe, but Geneon's problem was clearly their parent deciding
to punt.  They were making the financial targets their parent
had set when pretty much out of the blue they got a "lay off
everybody and sell your assets in whatever fashion possible".

I strongly suspect Geneon/their parent was responsible for
the failed handoff to ADV (well, perhaps ADV and Geneon should
have done more due diligence before making a big deal about it,
but Geneon's precipitous and notorious exit from the market put
a premium on fast action).

>Again, ADV is gone, but they're up to something, and change is what was needed now...not just sitting around waiting to run out like CPM did.

CPM never had a reasonable cost structure (based in NYC! although
so is Media Blasters) and got sandbagged by the Musicland etc.
shutdown.  After that they shutdown their company in a very orderly
way, it was sad but there wasn't a lot of nasty drama (at least
that I saw).  I have a lot of respect for that.

                                        - Harold