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With an already deferred debt payment looming on August 13, Blockbuster’s list of options grows thin. Bloomberg, citing “people with knowledge of the matter”, is reporting that it is likely that the once-mighty rental chain will receive yet another brief reprieve from its creditors so that it may prepare for a bankruptcy filing in the near future.

Blockbuster spokesperson Patricia Sullivan offered the following on the company’s “productive” talks with lenders:

“We’ve been transparent throughout this process about the potential sales or licensing of certain international operating assets . . . These discussions are ongoing.”

Wedbush Morgan analyst Michael Pachter thinks Chapter 11 is the only option left for beleaguered BB:

“The debt is killing them . . . They have to wipe the slate clean and get out from under $100 million or more of interest payments.”

Could a post-bankruptcy Blockbuster emerge as a leaner, more agile competitor in the swiftly changing home video marketplace, Insiders? Or was BB’s fate sealed long ago and it would be merely delaying its appointment with oblivion by entering Chapter 11?
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(via Bloomberg)

10 Responses to “Blockbuster to Get Yet Another Debt Reprieve?”

  1. Visitor [Join Now]
    Farva [visitor]

    They need to just let BB die already.

  2. Visitor [Join Now]
    Jamie [visitor]

    Just putting off the inevitable.

  3. Visitor [Join Now]
    Brad [visitor]

    I just hope Blockbuster Express survives; it’s probably the only profitable part of the company.

    • Visitor [Join Now]
      tinybrat [visitor]

      Blockbuster express isn’t owned by Blockbuster, its owned by NCR. NCR leases the ‘blockbuster’ name and pays blockbuster a very small amount per rental (less than 5 cents). It is not profitable by any means. NCR stated on their conference call the other day that they don’t plan on installing more kiosks after the end of this year. They are trying to hit the 10,000 mark, but said they would caution investors to not look for more installs past the 10,000 mark. They are looking at other ventures because they came into the kiosk business too late and they are not making any money on them. You figure each kiosk probably costs around $20k to make, plus the $5k or so to stock each one, plus the labor and payroll involved to maintain each one, plus the revenue-sharing with the studios and blockbuster, and the commissions to the stores they are in, each machine will have to rent over 30,000 times before it turns a profit. If they have 10,000 kiosks by the end of the year, they will need to rent approx 300 million discs before their machines are profitable. That doesn’t include all the free codes people use.

      As I’ve been saying for a year now, blockbuster will be filing for bankruptcy this month and will announce the closure of several hundred stores. My prediction is that they will continue to operate approx. 1500 stores for another year or two, and then it will entirely shut down, similar to Hollywood Video’s demise.

      Blockbuster Express has nothing to do with blockbuster and their pending bankruptcy, even if blockbuster goes away completely, NCR can just change the name on the machines.

  4. Visitor [Join Now]
    Nomo Blockbuster [visitor]

    Blockbuster continues to die ever so slowly and should really go straight for liquidation rather than bankruptcy. Blockbuster Express is showing little to no productive revenue since it’s a second mover to Redbox and the Blockbuster brand can no longer be trusted.

  5. Member [Join Now]
    ChadCronin [chadcronin]

    Heck, people don’t even like Blockbuster movies as much anymore. I think I’ll wait for Transformers 3 to come to Redbox over inflated theatre pricing. $1.50 Redbox Blu-ray compared to $11+ ticket with complimentary cell phone screen lights.

  6. Visitor [Join Now]
    John Small [visitor]

    You know, I’ve derided FLON for his owning Coinstar shares in a company that does not have much profitability or much hope for any in the future.

    But on a purely speculative level, this BBI bankruptcy, which surely is going to happen sooner than later, may actually give a nice bump to Coinstar’s share price.

    So perhaps over the short term, FLON is right in trying to pump up this company. Long term I still believe he is wrong though.

    • Visitor [Join Now]
      Firstlawofnature [visitor]

      Given your analytical skills I am comforted by your perpetual negativity.

      $1 a day will always be a better deal than lotion of the month.