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What's Happening with ADV Films

by Christopher Macdonald,

By now, everyone has read the news that ADV Films is "no longer." Unsurprisingly, the comment in various internet forums, including ANN's own, make it obvious that many people haven't read between the lines. Unfortunately ANN's editorial policy forbids us from pointing out the obvious conclusions in the news article itself (no editorializing is permitted in our news articles). Fortunately there are other vehicles with which we can address issues like these. Often times the ANN staff pop in to our forums to offer our insight on big news, but today I've decided to address the ADV story on the front page.

Before going forward though, I must make it absolutely clear that most of the following is informed speculation. So don't quote me on Wikipedia or anywhere else as a factual source.

First, a bit of history for those that aren't familiar with the story to date. Back in early 2006 A.D.Vision, Inc., the parent company of ADV Films, entered into a partnership with Sojitz Corp of Japan. In return for a small cash infusion (a couple million dollars) and various business services, Sojitz acquired an approximately 20% equity stake in A.D. Vision, while John Ledford, ADV's founder and CEO, maintained control of the remaining 80%. As a part of this arrangement, Sojitz, along with a few Japanese partners, set up ARM Corp, a licensing entity that would acquire North American rights for anime that ADV Films would release.

At first it seemed like a marriage made in heaven. Sojitz brought to ADV a ton of resources and connections in Japan. Unfortunately it quickly became evident that ADV's management style and Sojitz' were so incompatible that they would not be able to continue working together. After about 1-year they ended the relationship, and in the process ADV lost the rights to distribute virtually all the titles that had been acquired during that 1 year, as those titles were actually licensed to ARM Corp and not ADV. One thing that didn't change is that Sojitz continued to own 20% of A.D.Vision, Inc. This is a big problem because it's very, very hard for a corporation with a major hostile shareholder to acquire financing or investment.

Unsurprisingly, ADV sought to protect itself and new investors from this environment. In 2008, A.D. Vision announced a new partnership with Switchblade Films and Sentai Filmworks. Both companies would act as licensing partners that would acquire titles and contract the localization, sales and marketing to A.D. Vision and it's subsidiaries. Although the actual ownership of these two firms has never been fully disclosed, it's worth noting that the person on record for them is none other than John R. Ledford II (I've heard that Switchblade Films is someone else's baby though).

Today, several new companies have emerged, and these companies have acquired a large number of A.D. Vision's assets. AEsir Holdings has acquired “a subordinated interest in selected programming from ADV's film library together with other intellectual property.” What I've been told is that they've acquired all the “ADV Films assets.” Meanwhile, Valkyrie Media Partners, LLC has acquired Anime Network Inc. from A.D. Vision, and SXION 23, LLC , or "Section23 Films," has assumed “account servicing and distribution operations in connection with the library acquired by AEsir.” Finally, Seraphim Studios, LLC acquired Amusement Park Media from A.D. Vision.

It may be important to note that the press release doesn't state anything about the titles owned by Switchblade FIlms or Sentai Filmworks. These include all the recent additions to ADV's catalog such as Appleseed, Clannad and Ghost Hound.

What does this mean? (this is where I speculate) It means that AEsir Holdings owns most of ADV Films' former catalog, and that Section23 Films will handle marketing and sales of said catalog. I'm willing to bet that Section23 will also handle marketing and sales for Sentai and Switchblade, or AEsir may make a separate announcement where it acquires some titles from those companies. Amusement Park Media will continue to produce the English versions of all these titles.

So here are the two big questions. Who are these companies, and what will happen to ADV Films?

SXION 23, LLC, Valkyrie Media Partners, and Seraphim Studios, LLC are all recently registered Texas corporations with Griffin D. Vance, ADV's former SVP Business & Legal Affairs, as the person on record. This doesn't mean that Vance owns these corporations, he merely registered them on behalf of third parties. Given Vance's former employment with A.D. Vision, it's safe to assume that parties formerly involved with A.D. Vision are behind the new companies (we already know that various employees from ADV have been hired by SXION 23), possibly John Ledford , possibly others. AEsir is registered as a subsidiary of Net Master Hosting, LLC, a company we are otherwise unfamiliar with.

So what happens to ADV Films? This may be the end of ADV Films as a label, or possibly, if the ADV Films trademark was among the “intellectual property” that AEsir Holdings acquired from A.D.Vision, Inc., Aesir may continue to use the long established an well respected ADV Films brand. I know it certainly is what I would do. That said, I was told that today's press release would be the last press release ever from ADV Films.

So really, what was announced today? While the details will come out in the next few days, it's pretty obvious that it's not much more than a corporate restructuring that moves intellectual assets away from a dysfunctional corporate entity that has credit problems and hostile shareholders.

P.S., Long live / R.I.P. Animation Dubbing Vision, whatever the case may be.

Update: Corrected date of ADV/Sojitz deal, it was previously listed as having occurred in 2007. Thank you to John C.Watson for pointing this out.

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