Dish Networks To Buy Blockbuster Assets For $228 Million

DISH Network  has announced that it was selected as the winning bidder in the bankruptcy court auction for substantially all of the assets of Blockbuster, Inc. DISH Network’s winning bid was valued at approximately $320 million. After certain adjustments are made at closing of the transaction, including adjustments for available cash and inventory, DISH Network expects to pay approximately $228 million in cash to acquire Blockbuster at the closing which is expected to occur in the second quarter of 2011. This is surprising because if anyone would have been in the running for Blockbuster’s assets in an aggressive way I would have thought it would be Netflix. I mean at $320 million all of Blockbuster’s assets are really a bargain, I think Netflix took their eye off the ball. As far as Dish Network, I want to see how they play this as it looks like they plan to continue to operate several of Blockbuster’s physical locations and I don’t know how that fits into their current business model. This is a bit of a stretch for them but you gotta get in the game sometime.

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“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,” said Tom Cullen, executive vice president of Sales, Marketing and Programming 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 the transaction is contingent upon satisfaction of certain conditions, including bankruptcy court approval.

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