updated 04:00 pm EDT, Fri April 1, 2011
Dish and Icahn part of bidding for Blockbuster
The bidding to buy out Blockbuster now includes Dish Network and well-known activist investor Carl Icahn, insiders claimed Friday. The two are both supposedly making just the minimum bid, around $290 million, to qualify for the auction before it starts in earnest on Monday. The WSJ in scraping information was warned that new bidders could come into play or make unions with each other.
For Dish, the move would let it sell satellite TV subscriptions through Blockbuster's dwindling retail shops but could also give it leeway in bargaining for content with movie studios. Any deal for movies at Blockbuster could be contingent on Dish getting a promise for satellite.
Icahn, meanwhile, has been readily involved in the company even before its bankruptcy in September. He bought off its debt and helped craft a bankruptcy plan. His motivations are more likely cash-related and would hinge on turning Blockbuster around from losses, including $68.4 million total through the first two months of 2011, to reward himself.
Few other candidates are involved, but SK Telecom has signaled its plans. The Korean carrier likely wants to get content deals to bolster video on phones and tablets as well as to get away from depending solely on its network business for income.
Blockbuster turned to a sale after it faced a steep challenge coming out of bankruptcy as a viable competitor. Netflix has virtually gutted the incentive to visit Blockbuster, and services like iTunes have also undermined Blockbuster's own Internet video services.