We've received a fair amount of e-mail asking how American anime companies acquire rights and why they make the choices they make. In this column, I'll try to explain the complexities of transpacific licensing of anime.
Licensing is not an exact science, and each deal can be completely different, but we can generalize the process to give at least a rough answer to some of the more commonly asked questions.

Does the owner of a TV series have the rights to the OVA's?

This question is very straightforward. When a company licenses a product, the terms of the agreement are specified by the contract and only the contract.
For example, if A.D. Vision's contract says that they have the rights for the "BLUE SEED Television Series" then it is pretty likely that, without a second contract, AD Vision would have to sue to even have a chance at the OVA series. More likely, A.D. Vision will just be one of the first to find out about the new series and will place their bid early.
However, if A.D.. Vision's contract read "BLUE SEED Television series and all subsequent BLUE SEED Animated projects," then there is no doubt.
Saban uses a different method for its contracts. For both TEKKAMAN BLADE and GATCHAMAN, Saban licensed only the television series, but obtained an "option" on the OVA series. Legally, this means that Saban does not own the rights, but that Saban is first in line. For some other company to obtain the rights to the OVA's while Saban's option is still valid (usually constrained, like contracts, to a several year period) Saban would have to refuse the rights first. In other words, by spending a little money, Saban avoided having to pony up the cash for the entire series, and still, for all practical purposes, controls the rights.
There are many cases where a company for some reason or another only obtained one set of rights and the others were snapped up by a competitor.
For Example: PATLABOR: Movies by Manga Entertainment, OVA/TV by Central Park Media (CPM) ICZER: ICZER-ONE by Books Nippan, ICZER-THREE by CPM, ICZELLION by A.D. Vision

How does a company decide what to buy and what to distribute?

There are two general cases for obtaining contracts: the company looks for the title, or the title finds the company. In either case, it is not usually a situation where the company is able to decide what to release, but more a case of what the company is ableto release. Most times the wish list for Anime titles is much longer than any company can afford to release.

Case #1: The company looks for the Title.

A company interested in a particular show must first find out who has the rights for the title. For most US Anime companies this means primarily international video rights (if lucky, we can also pick up TV, cable, theatrical, etc.). Next, a contact in the rights-holding company must be found who is able to accept contract proposals and to make a final deal. Finally, the actual contract needs to be written up, the money must exchange hands, and the deal agreed upon by all parties. Of course, to make things interesting for anyone trying to get rights, in Japan, your typical anime show is produced by several companies, each putting up a share of the required funds in return for specific rights and a share in the overall project.
For example: EVANGELION was sponsored by Bandai, King Records, Gainax (who could have contributed labor instead of cash), TV Tokyo, NAS, and Sega (the actual copyright line reads Gainax/Project Eva/TV Tokyo/NAS). While I do not know who NAS is, or which companies were part of Project Eva, and I definitely do not have a copy of the contract to examine, I still know some details just from observation. Bandai manufactured the toys, Sega released the video game, and King Records released both the CD and the LD: therefore, these companies either are part of Project Eva, or put up some money at some point in the contract negotiations.
So who has the international video rights? Some would guess Bandai, some would guess Gainax. My money is on King Records for two reasons, first I know that King Records was shopping around the rights for BLUE SEED (obtained by A.D. Vision) and for SHADOW SKILL (obtained by Central Park Media); therefore King Records (AKA: Star Child) has a track record of obtaining these rights. Second, A.D. Vision, who has an established record with King Records (with at least BLUE SEED) was able to obtain the rights. Circumstantial evidence at best, but a reasonable guess.
Assuming that this presumption is correct, the scenario probably went something like this:

1. An AD Vision employee/owner becomes interested in EVANGELION and convinces the company to look into the title.
2. Seeing that King Records released the CD and was going to release the video, AD Vision contacts their contact who worked on their BLUE SEED deal and inquires about the rights, probably with an initial offer and a rough contract to get things started.
3. The King Record contact then makes sure that King Records owns the rights (or else he/she goes out and tries to get the rights) and acknowledges A.D. Vision's bid. Meanwhile, other bids and inquiries start to come in from other companies.
4. King Records tells the competing bidders that there is competition, and informs the lower bidders that there are higher bids. The lower bidders then either drop out or re-bid at a higher number.
5. Repeat step four until there is only one bidder left (in this case AD Vision)
6. Draft Contract, and set terms for minimum guarantee, or royalty advance
7. Sign contract, pay the money, send masters to USA.

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