Tuesday, April 26, 2011
DISH Network Buys Blockbuster
Earlier this month, satellite TV company DISH Network secured the winning bid in an auction to purchase former video rental giant, Blockbuster, for $320 million. After adjustments are made for available cash and inventory, DISH Network is expected to spend approximately $228 million to buy Blockbuster.
The deal is still pending approval of the bankruptcy
court. Once this hurdle is cleared, DISH Network plans to reorganize the bankrupt movie rental corporation. These plans include keeping approximately 1,700 stores open as well as leveraging Blockbuster's ability to help DISH Network deliver their existing video offerings.
Throughout the 90s and the early part of the past decade, Blockbuster enjoyed tremendous success and ranked as the nation's top video rental franchise. However, the company has fallen on tough times in recent years, largely due to its decreased market share at the hands of competitors such as Netflix and Redbox.
Blockbuster filed Chapter 11 bankruptcy in September 2010. At the time, the company still had 5,600 stores worldwide, including 3,300 stores in the United States. Blockbuster had $1.02 billion in assets and $1.47 billion in debt when they filed bankruptcy last fall. When DISH Network purchased the franchise earlier this month, the number of stores in the United States had dropped to 2,400, and approximately 700 more are expected to close their doors in the next month.