Tech & Biz

Blockbuster Video About to Go Bust?

by Jarrett Martineau | April 7, 2009 at 07:43 am

392 views | 10 Recommendations | 4 comments

Blockbuster's block is close to going bust, according to new financial information filed by the movie and video rental company.

If Blockbuster is operating on a quarter billion dollar line of credit — but it could face financial ruin if it is unable meet new conditions imposed on its lending.

Last month the company explored bankruptcy options, so this is not entirely without precedent.

The company lost $374 million last year and is facing increasing pressure from online rivals like Netflix.

The largest chain of movie and video game rental stores in the world appears to be teetering on the brink of collapse, according to a new filing with the SEC.

The company's current lifeblood is a $250 million line of credit, but that line of credit has some newly amended conditions, and the company isn't sure it can meet them.

"While we believe that all such conditions will be met and that we will be in a position to close on the amended credit facility on or about May 11, 2009, there can be no assurance regarding these matters," the company wrote in an April 6 filing with the Securities and Exchange Commission.

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brwnw

at 09:02 on April 7th, 2009

Thought the Tivo deal was going to save the company but according to this article...

Blockbuster's recent announcements that it would be partnering with TiVo, and get its content onto Apple devices, now just rings hollow. It was the right move, but taken far too late to have the needed impact on the company's fortunes.

http://www.fastcompany.com/blog/kit-eaton/technomix/despite-last-minute-online-plans-blockbuster-may-go-under

dfndr13

at 10:42 on April 7th, 2009

My personal observation was that they may have been trying to be everything to everyone. That isn't always a great business plan.

Amy Judd

at 11:26 on April 7th, 2009

I like Blockbuster way more than Rogers so I hope they don't go bust.

EJ (not verified)

at 13:31 on May 26th, 2009

I prefer Blockbuster to Redbox, Netflix, and streaming video via the Xbox-- I've tried them all. Call me crazy, but I like to walk the aisles and talk to people who have actually seen the movies-- I see my friends there, doing the same thing. The customer service makes the difference-- all the BB employees are locals, and we have gotten to know them over the years. To reduce this to a phrase like "brick and mortar" is overly simplifying things.

PS- We have access to all the latest technology, with an engineer and a techie in the house. Still, we pick BB.