Twentieth Century Fox and Sony Are Really in the Blockbuster Biz With First Lien on Dallas Co.'s Canadian Assets
For now, at least, hold off turning those Blockbuster drop-off boxes into ovens, as this woman's done in Liberia.
Late Tuesday, Blockbuster announced two items of interest -- one of which, at least, has prompted a early-trading jump of 15 percent in the Renaissance Tower-based company's stock price. Which puts it at a whopping 29 cents early this morning.
First, Jim Keyes's company sent news that it has wrapped up a deal with Fox and Sony similar to its arrangement with Warner Bros.: The studio will continue to provide product to Blockbuster -- at a deep discount, if yesterday's deal is anything like last month's Warners agreement. The terms of the Warners deal were never made public, but sources within the company told Unfair Park back then that Warners was doubling the amount of product made available to Blockbuster -- which is significant, given Warners' February deal with Redbox that keeps its titles out of the kiosks for 28 days after release. Warners was also taking less money upfront from Blockbuster as part of a revenue-sharing agreement intended to give Blockbuster more flexibility as it looks to pay down nearly $1 billion in debt and avoid the bankruptcy Keyes insists isn't inevitable.
Fox and Sony are also giving Blockbuster an enormous break on the price -- which is why they're getting a first lien on on Blockbuster's Canadian assets. Says Blockbuster exec VP and CFO Tom Casey of the new deal, "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."
Meanwhile, in docs filed with the Securities and Exchange Commission late Tuesday, Blockbuster announced to shareholders, who will gather in downtown Dallas May 26, exactly how it plans to execute that reverse stock split announced last week. It wants stockholders to agree to turn all Class B stock into Class A stock, which will all be rebranded "common stock," after which the board will do a swap "within a range of 1-for-15 and 1-for-25," according to filings. In other words, my 100 shares of stock will become four, more than likely. That's no fun.
Get the This Week's Top Stories Newsletter
Every week we collect the latest news, music and arts stories — along with film and food reviews and the best things to do this week — so that you’ll never miss Observer's biggest stories.