Blockbuster Closes New Studio Deals

DALLAS: Blockbuster has announced new deals with "enhanced payment terms" with Twentieth Century Fox, Sony Pictures and Warner Bros., providing day-and-date availability of movies for the DVD rental chain’s in-store and by-mail customers.

The three studios will provide new payment terms to Blockbuster in exchange for a first lien on Blockbuster Canada assets; the Canadian operation will continue with business as usual. The new payment terms are intended to help Blockbuster continue the recapitalization initiatives already under way. The company is also rationalizing its U.S. store portfolio and is working to cut operating costs by $200 million this year. Blockbuster is also in discussions with advisors for its bondholders related to debt recapitalization.

Tom Casey, Blockbuster’s executive VP and chief financial officer, said: "These positive signs of studio support are part of our overall recapitalization effort to drive top-line performance while reducing debt and operating costs at Blockbuster. This affirms our strong and collaborative business relations with these critical vendors."