Dish Network Gets Blockbuster For Around $230 Mil in Cash and a Pallet of Junior Mints

By Robert Wilonsky Wed., Apr. 6 2011 at 8:00 AM

Categories: Biz, From the RTF Dept.

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The question "Why does Dish Network want Blockbuster?" was asked and answered late last week, though one Friend of Unfair Park suggested, "Twizzlers." Turns out, the Colorado-based Dish wanted it plenty bad -- more than Carl Icahn and the lenders who turned up to take the Renaissance Tower-based Blockbuster off the auction block in New York City. Dish's winning bid, turned in at around 1:30 this morning, was $320 million, give or take a late fee. But as Dish says in its announcement this morning, "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."

Which seems awful cheap for a company that was $900 million in debt when its stock was delisted in last July and when it filed for Chapter 11 last September. Says Tom Cullen, executive vice president of Sales, Marketing, Programming and Microwaves at Dish, "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."

The deal's not expected to close till some time in the second quarter, and there's still a stack of complaints to plow through from movie studios and creditors who want to get paid. And through the bankruptcy judge won't officially OK the sale till a hearing tomorrow, that, as they say, is that.

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DISH Network and Blockbuster joining forces?! Well kinda! Lol. From a DISH Network perspective there will be new things such things as; over 100,000 titles to choose from; unlimited movies, TV shows and games through the mail. Plus 5 in-store exchanges per month, no due dates or late fees! Being a customer and employee of DISH Network, I can say that from a consumer stand point that DISH was the way to go for me even before working here. As a company DISH already 100% digital programming and video on demand in 1080p, and now there is more. There are plenty of reasons to go with DISH; this would be one to add to the list!
This is good reporting Robert on an important transaction. We have all been cheering on Netflix and now they will have some good solid competition as Dish joins Amazon and Apple in the new video frontier.
As a shareholder who got wiped out thanks to Blockbuster's inept management, I say kudos to Dish for paying rock bottom bargain basement prices. Now make sure the world knows how Jim Keyes, the former Blockbuster PT Barnum CEO with an overinflated ego, destroyed a perfectly good company through his failed leadership and misguided strategy. And a pox on the Board for agreeing with him and failing to stop all the bull. Robert, if you want "choke on toast and spit out the coffee" headline grabbing compelling numbers for your readers..calculate the share value destruction under Keyes...and compare that to his compensation. Also look at the priority list and who actually gets paid upon from the sale proceeds.
Is there REALLY that big a difference between "around $230 million" and "approximately $228 million"?
Why did you write the headline as $230 million when it is actually $228 million? Fore example, I hate it when writers will write "almost 50 percent" or "almost 1 in 2" when the actual figure is say, 43 percent. It is insulting to my intelligence to assume I don't know the difference between 43 percent and 50 percent. Yes, there is a big difference between $228 million and $230 million. The first one is correct and the second one isn't.
@Chris, thats not a DISH thing, its a FSN thing. They dont offer enough HD programming to run 24/7.
"cross-marketing and service extension opportunities" were supposed to make the AOL-Time Warner merger a great success too. but maybe DISH is getting this business cheap enough that it can squeeze water from a stone
Who, besides me, has seen the Redbox knock-off buried deep in the West Village parking lot that also does video games? Ain't blockbuster, but, still...
It's also: One company I've never done business with buying a company I'll never do any business again. Let's see if Dish jacks up their late fees... <snicker>
I had Dish once, and every month a billing error, which meant HOURS on the phone with people that were too stupid or just didn't care, then I moved and when the re-installers arrived and realized they would have to get on a ladder to reach the roof and maybe have to spend a little time to get me hooked up, they said they couldn't do it. I then had to spend a long time on the phone with various managers and dispatchers and ended with them cancelling my contract. Never again. Now I have Uverse. It plugs into a phone jack.
I find it ironic Cheap Charlie has the scratch to throw down on Blockbuster, yet cant seem to offer Fox Sports Southwest in HD 24/7
I don't get it. What's with the Dish hate?
I don't think the Blockbuster people are dumb enough for that job, which is saying quite a bit about Dish.
I hope they at least get jobs as Dish Network sales people.
Ah, thank you, Robert. Not enough caffeine yet this morning.
One company with whom I will never do business buying another company with whom I haven't done business in probably a decade. Nice.
haha no worries, made me choke on my toast. Well hell, 900 million should do that too, I guess we're desensitized by large debt these days.
You'll note: The winning bid was $320 mil, but Dish says "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."
Is it $230 Mil in the headline or $320 million in the first paragraph? That's a lot of late fees.
Yes, it was only (?!) $900 million. I've corrected. Thanks.
made me do a double take on the 900 billion thing.
I hope Blockbuster employees will enjoy their new jobs as Dish Network sales people.
Thats interesting, maybe Blockbuster will show some life again. You're right Bob, thats dirt cheap. Ergen(Dish's CEO) is worth 5.2 Billion according to Forbes so he probably just went to his safe to get the cash for this deal.