DISH Buys Blockbuster Out of Bankruptcy

The widely recognizable Blockbuster brand along with most of its corporate assets now belong to DISH Network who purchased it out of bankruptcy with a winning bid of approximately $320 million. DISH reports the final transaction should cost them about $228 million after “… adjustments for available cash and inventory…” are taken into account. DISH expects the deal to close in the second quarter of 2011.

“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 in a news release. “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.”

With the acquisition, DBS operator DISH gets some interesting assets including a valuable brand, streaming rights for movies with faster availability than Netflix, and the retail store footprint, among others. It will be interesting to watch how DISH integrates Blockbuster into their operation.

Cullen’s statement seems to suggest they intend to utilize the retail stores, although they will surely close many of them. With a retail footprint, DISH can ramp up retail sales opportunities for their subscription video services, as well as many other opportunities, maybe even including its corporate cousin Echostar’s Sling Media portfolio.

Many may argue the streaming rights might be the best asset, besides maybe the brand itself. Blockbuster was able to negotiate streaming ‘windows’ which gives them access to titles before Netflix and others. Expect to see a ramped up VOD effort from DISH/Blockbuster as a result.