Daly defends vid sales forecast in Disney trial

D'Works exec returns to witness stand to recount figures

By JANET SHPRINTZ

DreamWorks executive Ann Daly returned to the witness stand Thursday in Jeffrey Katzenberg's breach of contract case against Disney to defend her predictions on video sales.

Katzenberg is suing Disney to get a post-employment bonus of 2% of the profits on all film and television products made while he was head of Disney's filmed entertainment division.

Continuing his cross-examination, Disney chief of corporate operations Sandy Litvack questioned Daly, who is appearing as an expert witness, about her predictions on video sales for "Pocahontas," the re-release of "Little Mermaid," "Hercules" and "Mulan."

"Weren't your numbers high in every case?" Litvack asked.

Daly disputed that Litvack was using her numbers, and pointed out that in the cases of "Mulan" and "Little Mermaid," they had not yet completed their video cycles.

Litvack also challenged Daly's theory that the animated version of "101 Dalmatians" fared poorly in video re-release because it had to compete with the live-action version.

Daly had testified earlier that the animated version was disadvantaged by the fact that it costs almost a third more than the live-action version. Daly illustrated her point with a photo of video display showing the two films being sold side by side.

But Litvack pointed out that the live-action video looked like it was just placed in the wrong display. While Daly conceded that Disney would never intentionally put the two products side by side, she said that studios have very little control over how their product is actually displayed, implying that the marketing difficulties on "101 Dalmatians" were inevitable.

On redirect questioning by Katzenberg attorney Bonnie Eskenazi, Daly revisited a chart on box-office performance of animated features. At an earlier session, Litvack had pointed out that until 1995 Disney outstripped all the competition combined but thereafter faced stiffer competition.

But Daly explained Thursday that Disney did not dominate animation quite so much in the mid-'80s.

Pressing the point that the biggest factor in box-office performance is the quality of the film, Daly showed that in 1998 Disney's "A Bug's Life" did better, even though it competed with Paramount's "Rugrats," than Disney's 1997 "Hercules" did without any competition.

Daly, who was at Disney before jumping to DreamWorks, also was questioned on the hotly contested issue of whether Disney will ever make videos of its stage plays.

When asked by Litvack how she would market them, retired L.A. Superior Court Judge Paul Breckenridge said jokingly, "You're not paying her to be a consultant."

Litvack responded, "But your honor, she created our whole direct-to-video market."

When Litvack cross-examined Daly using DreamWorks' own video projections, DreamWorks' attorneys asked to keep the documents confidential. Breckenridge asked reporters to leave the courtroom.

But upon their return about 15 minutes later, Breckenridge announced that the material was not confidential and the media would be provided with a transcript.

Litvack's intention was to use video projections Daly made about DreamWorks animated film in 1998 and 1999 to show that her own projections were downward. But Breckenridge ruled that the documents were not relevant, and once again, Disney failed to get DreamWorks documents into evidence.