DISH Network Attains Blockbuster Assets for $320.6m
The leading satellite provider of the nation, DISH Network has obtained the assets of video rental chain, Blockbuster on a bankruptcy auction conducted under the administration of US Bankruptcy Court for the southern district of New York for a whopping amount of $320.6 million. The DISH Network purchase agreement stating that Blockbuster will procure $228 million in cash distributions, will be finalized on April 21st 2011.
Commenting on the fruitful deal established between DISH Network and Blockbuster, Jim Keyes, CEO and chairman of Blockbuster, reflected, “We are delighted that a strategic bidder, DISH Network, recognized the value not only of Blockbuster’s assets, but also of our people, our store base and multi-channel offering.”
The streaming video service provided by Blockbuster will not only be an addition on to DISH Network services but will also help DISH Network to compete with video on demand services, DVD rental kiosks like Redbox and online video streaming services like Netflix. DISH Network has not confirmed any plans regarding Blockbuster or any of its stores. However a source has revealed that as a means to sell subscriptions to its satellite TV services, DISH Network will use Blockbuster’s recent locations.
The strong establishment with Blockbuster has surely laid a good foundation for DISH Network and consequent gains and profit margins are likely to soar up. Tom Cullen, executive vice president of sales, marketing and programming for DISH Network remarked, “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-marking and service extension opportunities for DISH Network”.
DISH Network defeated two other competitive bidders in the auction to proclaim the winning position. DISH won over a $310.6 million offer from a group led by billionaire investor Carl Icahn and a $308.1 million offer from Cobalt Video, a group of hedge funds led by Monarch Alternative Capital LP.
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