DISH Network Corporation has announced that it was chosen as the winning bidder for largely all of the assets of Blockbuster, Inc in the bankruptcy court auction.
The winning bid by DISH Network, the fastest growing satellite TV service was valued at approximately $320 million. After some adjustments are made at the closing of the transaction, including adjustments for available cash and inventory, DISH Network anticipates to pay around $228 million in cash to purchase Blockbuster at the closing that is expected to take place in the second quarter of the year 2011.
Blockbuster Inc. is an US-based chain of VHS, DVD, Blu-ray, and video game rental stores. At its peak in 2009, Blockbuster had up to 60,000 employees. In January 2010, there were over 5,000 Blockbuster stores in the U.S. as well as 17 countries worldwide. The company filed for bankruptcy on September 23, 2010. And now DISH Network was chosen as the winning bidder to acquire most of its assets.
Tom Cullen, executive vice president of Sales, Marketing and Programming for DISH Network, said, “With its more than 1,700 store locations, a highly recognizable brand and multiple methods of delivery, Blockbuster will complement our existing video offerings while presenting cross-marketing and service extension opportunities for DISH Network. While Blockbuster’s business faces significant challenges, we look forward to working with its employees to re-establish Blockbuster’s brand as a leader in video entertainment.”
Completion of this transaction is dependent upon fulfillment of certain conditions, including bankruptcy court approval. However, this is going to be an excellent business move on DISH Network's behalf. DISH Network will use Blockbuster to promote its services as well as to extend its ability to deliver movies, seemingly through the Internet as the TV entertainment business gradually becomes more digital.
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