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Topic: Blockbuster's future in question

Brad Miller
Administrator

Posts: 17775
From: Plano, TX (36.2 miles NW of Rockwall)
Registered: May 99

posted 04-07-2009 11:20 PM

Blockbuster gets going concern notice: SEC filing

quote:
Mon Apr 6, 2009 4:39pm EDT

LOS ANGELES (Reuters) - Blockbuster Inc (BBI.N), the largest store-based U.S. movie rental chain, said the risk that it may not complete a deal to amend its credit facilities raises "substantial doubt" about its ability to continue as a going concern, according to a securities filing on Monday.

Blockbuster Chief Executive Office Jim Keyes warned investors last month that the company's financial statements and auditors' report likely would include reference to going concern risks until the loan amendments were completed.

The company reached an agreement last week with its remaining creditors to restructure a $40 million term loan due in August. Blockbuster had earlier obtained agreements with lenders under its existing revolving credit facility to amend and extend the facility through September 30, 2010.

The principle amount of the facility will be reduced to $250 million, and Blockbuster's creditors agreed to waive default. The amendments were set to close on May 11, the filing said.

"While we believe 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 filing said. "The risk that we may not successfully complete this refinancing...raises substantial doubt about our ability to continue as a going concern."

Blockbuster reiterated on Monday its fiscal year 2009 forecast for lower worldwide same-store revenues compared with the fourth quarter of 2008.

The company operates 7,400 stores globally and had total debt of $780.9 million under its credit facilities and senior subordinated notes as of January 4, the filing showed.

Shares of Blockbuster closed up 1.2 percent, or 1 cent, at 88 cents per share on Monday on the New York Stock Exchange.

(Reporting by Gina Keating; editing by Carol Bishopric)

And also don't forget this important news report about Blockbuster.

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Jesse Skeen
Phenomenal Film Handler

Posts: 1517
From: Sacramento, CA
Registered: Aug 2000

posted 04-08-2009 07:13 AM

PLEASE let it be true this time! They came pretty close a couple years ago but managed to pull through.

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Bobby Henderson
"Ask me about Trajan."

Posts: 10973
From: Lawton, OK, USA
Registered: Apr 2001

posted 04-08-2009 10:47 AM

A lot of entertainment and media companies have been taking a beating over the last year or two. Stock prices for Time Warner and Disney are in the toilet. Newspapers are failing right and left. Ad revenue is down significantly.

Naturally the downturn in the economy has a lot to do with this. However, I can't help but wonder if the Internet itself is doing much to kill those businesses. Millions are reading news for nothing on the Internet versus paying money to see the same news in print hours later or a day later with a newspaper. With enough newspaper failures it would seem like news organizations like the Associated Press and Reuters would have to dramatically scale back operations due to having fewer paying customers.

I think it's inevitable that the corner video store is going to become a thing of the past. VOD and PPV services through cable and satellite have already grabbed a lot of market away from traditional video stores. Red Box rentals in Wal Mart add more downward pressure.

TV networks are suffering from lower ad revenues. Not only is the economic downturn affecting it, but ad buyers are saying the commercial time is not worth nearly what it was years ago. The much wider variety of TV channels has watered down the pool of viewers. Millions of viewers are time shifting, recording shows on DVRs, watching them later and skipping past the commercials.

At some point I think the freeloading of content and skipping of commercials is going to bite millions of viewers at home in the butt some time in the next few years. It costs a lot of money to produce a good quality TV show -money that often comes in through investors. If those investors and the networks themselves can't make any money producing and distributing that content then a lot less of it will be made.

It will be interesting to see what happens over the next few years, but I think video stores, newspapers and lots of local TV stations will end up as casualties in all this.

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Claude S. Ayakawa
Film God

Posts: 2738
From: Waipahu, Hawaii, USA
Registered: Aug 2002

posted 04-08-2009 02:01 PM

As a Blockbuster online customer, I hope they can hang on and continue to operate. It is very sad when various entertainment and computer vendors I had used including Tower Records, Circuit City, Comp USA have all closed.

-Claude

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Julio Roberto
Jedi Master Film Handler

Posts: 938
From: Madrid, Madrid, Spain
Registered: Oct 2008

posted 04-08-2009 06:02 PM

Blockbuster closed all their stores in Spain (about 175) about a year ago. There are no other large-chain equivalent rental operators in Spain.

Most of these types of rentals are done through machines on the street similar to ATM's where you choose movies from a catalog and the machine spìts it out like cash on an ATM. Pay with credit or through the cellphone.

http://www.cinebank.com/cinebank/web/comomigra.asp
[link is to cinebank chain of movie rentals operation page]

You return through the machine too.

Still, I see fewer and fewer of these machines around lately. There were tons during the VHS days.

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Brad Miller
Administrator

Posts: 17775
From: Plano, TX (36.2 miles NW of Rockwall)
Registered: May 99

posted 04-08-2009 07:23 PM

quote: Claude S. Ayakawa
It is very sad when various entertainment and computer vendors I had used including Tower Records, Circuit City, Comp USA have all closed.

Hmmmm, first it was the Waikiki Theaters, now this? I am seeing a definite pattern here. Claude is bad luck! [Razz]

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Claude S. Ayakawa
Film God

Posts: 2738
From: Waipahu, Hawaii, USA
Registered: Aug 2002

posted 04-08-2009 07:48 PM

Bad Luck?

Thankfully I still enjoy good health, a loving family and lots of wonderful friends, my photo career, my new HDTV, Blu Ray and my h u g e library of movies and all of you here at Film Tech [Smile]

-Claude

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Brad Miller
Administrator

Posts: 17775
From: Plano, TX (36.2 miles NW of Rockwall)
Registered: May 99

posted 04-08-2009 08:13 PM

No, only bad luck to businesses that you patronize. [Wink]

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Mark Gulbrandsen
Resident Trollmaster

Posts: 16657
From: Music City
Registered: Jun 99

posted 04-08-2009 08:58 PM

I don't think it would matter much... they'll just rent elsewhere. And at least around here there are lots of other rental places.

Mark

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John Wilson
Film God

Posts: 5438
From: Sydney, Australia.
Registered: Dec 1999

posted 04-08-2009 10:54 PM

Fire sale at Claude's BluRay store.

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Jesse Skeen
Phenomenal Film Handler

Posts: 1517
From: Sacramento, CA
Registered: Aug 2000

posted 04-09-2009 07:05 AM

I've always boycotted Blockbuster because of their stupid no NC-17 policy. For a long time they were the major reason why more movies didn't get released with that rating; Wal-Mart's probably a bigger reason now. Last time I was bored and went looking around in a Blockbuster store, I was amused to see that they had the 'unrated' versions of all movies that were available that way (including the last American Pie sequel, which would have been rated NC-17 had it been rated) but they had an edited version of Lust Caution which was originally NC-17.

Looks like all their stores dumped VHS some time ago, so when they have the big going-out-of-business sale it won't even be worth looking for old rare stuff.

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Bobby Henderson
"Ask me about Trajan."

Posts: 10973
From: Lawton, OK, USA
Registered: Apr 2001

posted 04-09-2009 09:40 AM

I doubt American Pie would have earned a NC-17 for the stuff that was included in the "unrated" version. Basically the "unrated" version is just a marketing scam. We've seen it repeated through numerous other movies. Dodgeball is another one that comes to mind. Stores like Blockbuster and Wal-Mart slowly figured out the difference and finally started stocking such movies while avoiding unrated movies that actually do stray into NC-17 territory.

I usually rent movies from Hastings Books Music & Video because they have a better selection of films than Blockbuster or Hollywood Video. They also stock NC-17/unrated movies Blockbuster and Hollywood Video won't carry. Not surprising, they've grown their selection of Blu-ray rental movies far faster than Hollywood Video and Blockbuster have managed. The only thing I dislike about Hastings is their stupid habit of cramming both discs of a 2 disc movie release into a single disc container. After all these years and many customer complaints they still have the idiotic practice in place. So I'll visit Hollywood Video for the 2-disc movie rentals.

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John Wilson
Film God

Posts: 5438
From: Sydney, Australia.
Registered: Dec 1999

posted 04-09-2009 06:28 PM

Anyone in the Sydney area should check out fellow Film-Techer Michael Barry's fabulous DVD GALLERY in Double Bay.

If it's available on DVD, you'll find it there. He's done a great job.

As far as Schlockbuster's demise...I couldn't care less. As a general rule they are full of useless staff who know absolutely nothing about movies. As an example, I went looking to rent 'Raiders Of The Lost Ark' on DVD one night. I asked the dip behind the counter if they had it. Blank stare. Oh, I added (cringing) 'Indiana Jones and the Raiders Of The Lost Ark' thinking this would be what they know it as...or at least they would know 'Indiana Jones'.

His answer (amidst more blank looks as he punched into his computer)...

"Is that 'The Simpsons'?"

I kid you not.

I uttered not another word , turned and left the store.

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Bruce Hansen
Jedi Master Film Handler

Posts: 847
From: Stone Mountain, GA, USA
Registered: Dec 1999

posted 04-09-2009 07:54 PM

Blockbuster wants $5 per rental. That's way too much. Wallmart is renting DVDs for $1. Gee, I wonder why blockbuster is in trouble?

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Mike Blakesley
Film God

Posts: 12767
From: Forsyth, Montana
Registered: Jun 99

posted 04-09-2009 11:29 PM

Leave it to Wal-Mart to devalue something to the point that the public's perception of it is ruined.

If Wal-Mart needed to make money on DVD rentals like Blockbuster does, they would charge a reasonable price for them. As it is, Wal-Mart makes a killing on groceries (why do you think they're scrambling so hard to build a SuperCenter in every corner?) so they can use DVD rentals as a loss leader.

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