Well, the government’s seemingly relentless campaign to criminalize business in the post-Enron era has finally reached the one industry — the movie business — that relishes such matters when they happen to somebody else.
The Wall Street Journal ($) is reporting today (free article here) that an ongoing investigation into DreamWorks Animation SKG Inc has been broadened by an SEC informal inquiry into Pixar Animation Studios after Pixar had over-estimated the number of sales upon its release of The Incredibles DVD.
This particular saga began when DreamWorks cut its earnings forecasts twice after heavy returns of its Shrek 2 DVD. In the case of DreamWorks, the SEC is apparently focusing on whether the studio should have informed investors earlier of the problems with Shrek 2 given the studio’s knowledge that DVDs were having an increasingly short shelf life than previous DVD issues. DreamWorks shares fell about 5% in May ahead of the release of its first-quarter results after an online report predicted that the results would be worse than expected, and then the company subsequently warned of lower earnings forecasts because Shrek 2 DVD sales had fallen short of expectations. Similarly, on June 30, Pixar announced that it would miss its second-quarter earnings because it had underestimated the rate of returns by retailers of The Incredibles DVD and that sales of the movie’s DVD had fallen about 7% short of estimates.
The studios are probably already working on a documentary similar to this one. As for what such a film would look like, Professor Ribstein — the expert on how business is portrayed in films — presents his case.
Like this:
Like Loading...
The subject of the fourth segment of the series of posts analyzing the key Stros players (previous posts here, here, and here) is thirdbaseman Morgan Ensberg, who is enjoying one of the best seasons of any hitter in Stros history.
