Our family saw the first Shrek in the theater and then far too times on DVD. By the time Shrek 2 had come out we were pretty much burned out on the whole thing—especially with the Burger King, plush toys, etc.. Evidently we weren’t alone. Dreamworks, unaware that people were getting sick of the ogre, projected sales for the sequel based on sales of the first one. Bad idea. Now they’ve got a lawsuit which could have been avoided either by being more conservative on the DVD projections or not over-exposing the crap of Shrek the first time around.

Latest Business News and Financial Information | Reuters.com

DreamWorks Animation SKG Inc (DWA.N: Quote, Profile, Research) on Thursday was hit with its first shareholder lawsuit since going public — a proposed class action accusing company officers of misrepresenting DVD sales for “Shrek 2.”

The lawsuit filed in Los Angeles federal court says DreamWorks Chief Executive Jeffrey Katzenberg and board Chairman Roger Enrico failed to disclose in the first quarter that sales of “Shrek 2″ DVDs were declining far more than expected.

The suit says DreamWorks continued to ship the title “far in excess of the actual demand” and hid the fact that retailers were returning “massive amounts” of unsold DVDs.

Wasn’t this the type of thing that Enrico was supposed to keep from happening? And yes, this is another good day for Eisner. Now all Michael needs is a dissident director for the trifecta.

This entry was posted on Friday, June 3rd, 2005 at 10:11 am by Insider and is filed under Media. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.