Charlie Ergen’s Dish Network was indeed the winning bidder in the US Bankruptcy Court auction of the assets of Blockbuster Inc. The price tag was pushed up in the auction from the minimum bid of $296 until other bidders dropped out and Dish claimed the prize at $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,” the winning bidder announced.
Which brings us back to the original question of why Dish wants the struggling video rental chain. “We think that Blockbuster could be the way that Charlie Ergen gets content for a potential over-the-top product – one that could end up competing with Netflix down the line,” we quoted Wells Fargo Securities analyst Marci Ryvicker as saying in our previous story.
“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 Dish Executive VP of Sales, Marketing and Programming Tom Cullen.
“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,” he added.
RBR-TVBR observation: Probably not good news for Netflix, whose business success had a lot to do with driving Blockbuster into bankruptcy. Charlie Ergen will be a much more nimble and aggressive competitor – plus he can use Dish to drive business for Blockbuster.