Gainax are currently in crisis following the news at the beginning of this month that director of the company Maki Tomohiro was arrested for inappropriate conduct with a teenage voice actress, including taking photos of her naked and inappropriately touching the voice actress under the guise of massaging her feet. At the time, many news outlets reported on the story by noting the relationship of Gainax to the Neon Genesis Evangelion franchise, something that, at the time, studio khara and Hideaki Anno were quick to come out against due to the company no longer being involved in the series. This appears to have been of particular annoyance to Hideaki Anno himself, however, as he has made his frustrations public in an editorial piece for Diamond Online, accusing Gainax of mishandling the Evangelion franchise, long-term mismanagement over 2 decades, attempts to avoid repaying loans made to the company and more.

The Foundation of Khara Inc. and studio khara

The editorial begins by referencing the news about the arrest of the director of Gainax earlier this month, stressing his thanks for the victim and his disappointment for what had happened.

One major issue with the reporting on the case in the mass-media for Anno was the way in which it was discussed by many major outlets. In essence, Evangelion is no longer affiliated with Gainax, in spite of their production of the original work in 1995, however, reporting on the director’s arrest referred to Gainax as being responsible for the Evangelion franchise. The person arrested was not a part of Gainax at the time having only joined the company a few years earlier, while no-one involved in creating Evangelion is currently at Gainax today.

This is an issue when considering how the new Rebuild movies are being produced. As Anno explains, the anime is now produced by Khara Inc., a company he manages as CEO. For him, headlines that denote the ‘Evangelion Production Company President has been arrested’ could be misinterpreted as being him.

As a representative of Khara, the director of Evangelion and because of his duty to protect the staff and work, Anno views it as being his responsibility to speak out about this issue, speaking out about Gainax in the process.

The Mishandling of Evangelion’s Success

To begin with, he chooses to give background to the creation of Evangelion itself, the reasons he left the company and his desire to continue with the work at Khara.

Originally, it was planned for Hideaki Anno and the main sponsor on the production committee for the Evangelion anime, King Records, to go to a company other than Gainax to create the work. After talking to Sawamura about the desire to make it at the studio they were already at, however, it was decided that Gainax would be the studio responsible for the creation of the anime, with the assistance of another company due to the size of the company at the time.

The success of the anime meant more money was coming into Gainax than ever had before, only further boosted by the transfer of commercialization rights to Gainax themselves in 1997. In spite of this, mismanagement on a variety of projects meant the company was still struggling to make money, which had a major impact on the staff who received very little return for the hard work they put into the work.

Even after the then-president of Gainax Sawamura was arrested for tax evasion and later replaced, mismanagement continued, a situation more problematic as the massive returns on the creation of Evangelion couldn’t continue indefinitely. This led to Anno trying to make a difference and it was at this point where the issues of low pay for the staff behind this work was made much more of an issue for the director after learning of the large pay disparities between the staff and the management who did little to help the company. Attempts to use his influence to change this fell on deaf ears.

These issues influenced Hideaki Anno’s decision to move away from Gainax for a new production of Evangelion. Even after finances recovered from pachinko conversions of the series and external investment, poor management decisions continued, and by creating a new company, Khara Co. Ltd., more control on production costs, as well as greater care being given to staff, was possible during the creation of the movie reinterpretation of the series. While initially planned to be worked at through another studio, assistance provided to Anno allowed the creation of studio khara.

Although the movie would be worked on through an external company, a relationship would still be required with Gainax due to their hold of the rights to the series, and this is where many problems begun to arise.

Hideaki Anno’s Deal for Evangelion With Gainax, and the Failure to Pay Royalties

The deal made to create the movie version of Evangelion away from Gainax clarified that Hideaki Anno was the original creator of the series and that the new company could receive revenue from commercial royalties from the movie. Merchandising rights and copyright, however, remained at Gainax, an ideal move at the time due to Khara’s recent formation leaving them short-staffed to deal with such issues and royalty distribution making it a win for both sides.

This is where issues began to occur, however. Royalty payments due to be paid by Gainax to Khara were delayed starting in 2012, and discussions on payment plans that allowed the company to pay over longer periods of time were required. Mismanagement at the company was deteriorating and the financial situation at the company was not as strong, so President (at the time) Yamaga and director Takeda Yasuhiro negotiated the payment plans. This was in spite of the fact that, as Anno makes clear in the article, rights for anime he worked on previously such as Nadia and Aim for the Top! remained at Gainax, alongside royalties for Love and Pop.

The situation at Gainax worsened in 2014 when Takeda came to Anno personally to plea for money to help the company. The situation was dire enough that the company needed 100 million yen (roughly $1 million) in under 3 days or the company would be in trouble. A deal for Khara to loan this money was put in place, with the transfer of rights relating to Evangelion away from Gainax which had previously been agreed being brought forward one year as part of the loan agreement. This was always planned but had previously been put on hold. If payments were made on time by Gainax, however, the loan would be interest-free. To Anno, this was done partially as an attempt to support a struggling company and a friend from his school days.

Anno’s Failed Attempts to Purchase Rights for FLCL

After the loan was finalized, discussions went into place in 2014 for the purchase of rights for Aim for the Top! and FLCL from Gainax, due to their situation making any continuation of the work at Gainax a difficult proposition and his thoughts and worries about the future of the work also factoring into these desires. While discussions were proceeding on this front and terms were agreed, the price being requested suddenly increased 6x to an unreasonable amount without explanation. This was later due to the fact that these works were instead sold off to other companies without his knowledge.

The reasoning for this, however, was due to the intervention of banks which had loaned money to the company. They had intervened in concern for their investment, and due to this Gainax was forced to sell its properties to recoup money and undergo restructuring which resulted in massive staffing cuts. Other works he was not involved in were also sold.

These issues made concerns about the situation with Evangelion and the promised repayments, so Hideaki Anno requested that Gainax explain the financial situation and detail their repayment schedule. Delays would be considered if necessary and the situation was explained. However, the only response gained was that there was no issues and that payments would be made on time.

They weren’t.

Transfer of Rights, Employees Away from Gainax

Without Anno’s knowledge, Fukushima Gainax, now known as Gaina, was formed in November 2015, initially fully owned by Gainax before an ownership transfer later occurred and all shares in the company owned by Gainax were dissolved.

In April 2016, royalty payments were suddenly delayed, with requests for information ignored, even when Yamaga was directly contacted by e-mail or by phone. The number of companies related to Gainax, such as Gainax West, formed in May 2014, and Gainax Niigata in April 2016, increased around this period, with the rights for many Gainax shows being transferred to these companies, such as the rights for Panty and Stocking With Garterbelt being transferred to Gainax West.

Eventually, with concern related to the rights of Evangelion becoming more pressing than even missed repayments, requests were made for provisional foreclosure of Gainax by Hideaki Anno and even after success here, payments were not forecoming, leading to a lawsuit. Through the lawsuit, it was revealed that large amounts of materials related to previous works were sold to Fukushima Gainax without the knowledge of the companies involved in their creation or production, and these are now in the control of a separate company at the consent of all parties involved.

At the end of 2016, the animation division was at Fukushima Gainax, with Gainax itself transferring all employees to this new animation decision, essentially leaving Gainax a shell of its former self.

Hideaki Anno, Gainax, and Evangelion: The Present Problem

Which brings us to the present day, and the arrest of the director of Gainax for the claims of inappropriate conduct with a voice actress.

The intent by Anno in creating this op-ed was to try and separate the name of Gainax from the series he has created and cultivated for many years, and in doing so brings to light previously-unknown cases of mismanagement and mistreatment at Gainax over the course of multiple decades. Low staff wages to animators were contrasted by inflated wages for management and poor investment decisions that repeatedly cost the studio money. The company mishandled the Evangelion franchise and failed to keep up repayments due to Hideaki Anno related to the Evangelion franchise due to the company’s financial disarray. Not only that, rights to various Gainax properties and the soul of Gainax itself were handed off to other subsidiaries, leaving a shell of a company in its place, a sad and destitute memorial to a once-great animation studio brought to its knees by mismanagement and greed.

For Anno, this also has personal costs: the loss of a friend. In many ways, even as we edge towards the eventual conclusion of the Evangelion movie series after many years, it has come at great personal cost to Hideaki Anno while being the one bright spot in a process where the lives and livelihoods of staff involved and the once-proud company who created the original work over 2 decades prior have been lost.