Satellite operator Dish Network has asked the U.S. Bankruptcy Court for more time to determine which of video rental chain Blockbuster’s 1,500 retail locations it wants to keep operating. Earlier this month, Dish Network inked a deal to acquire BlockBuster’s retail rental business; although Dish has indicated it intended to keep some existing Blockbuster locations operating, the terms of the deal—including which locations would remain open—were to have been finalized this week. Dish Network is asking for an additional 90 days to evaluate Blockbuster’s retail operations and decide how to proceed.
Technically, once the deadline for finalizing the acquisition passes, Dish Network could be on the hook to pay Blockbuster some $500,00 a day for each day that goes by without a finalized deal.
Dish Network bid some $320 million for Blockbuster’s retail business, but will be paying about $230 million after adjustments are made for Blockbuster’s assets, inventory, and cash.
In winning the bid for Blockbuster’s retail business, Dish Network indicated it planned to re-energize the brand to put it back into the forefront of the video entertainment business. However, Dish has not indicated how it plans to do that: Blockbuster’s retail business continues to face significant competition from online rental services like Netflix, Amazon On-Demand, and Apple’s iTunes, while firms like RedBox have been successfully siphoning off consumers looking for physical DVDs. Blockbuster operates its own video streaming service, but has yet to gain significant traction in the marketplace.
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