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Summary:

Charlie Ergen just added another kind of home entertainment business to satellite operator Dish Network (NSDQ: DISH) (NSDQ: DISH, picking up…

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Charlie Ergen just added another kind of home entertainment business to satellite operator Dish Network (NSDQ: DISH) (NSDQ: DISH, picking up Blockbuster (NYSE: BBI) in a bankruptcy court auction with a bid worth about $320 million. (For fun with numbers, Ergen bought Sling Media in 2007 for $380 million). Whether or not it’s an actual win for Dish remains to be seen but it is a considerable expansion of its own version of TV Everywhere strategy.

Dish estimates the deal actually will cost about $228 million in cash when it closes later this quarter, taking cash and inventory adjustments into account. The pre-market announcement was typically terse, with a prepared statement from Tom Cullen, EVP of Sales, Marketing and Programming: “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.”

Some bidders wanted to liquidate Blockbuster. Ergen — who is known for being frugal — doesn’t need to own a chain of stores to sell subscriptions in a retail environment but a revamped Blockbuster could offer the chance to showcase Dish without competition from DirecTV (NYSE: DTV) or others. Perhaps more important for a company that has been pushing its ability to serve subscribers in ways beyond the satellite dish, including the emphasis on delivering programming across devices, Blockbuster On Demand offers instant movies on a wide range of devices, including connected TVs, Blu-Ray and mobile, for rental and sale.

The Wall Street Journal was first to report the deal, which beat out bids from Carl Icahn, among others.

  1. Well all the dishes in the world won’t help if it doesn’t have an Internet Marketing strategy!

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