Blockbuster Inc. has announced new agreements with Twentieth Century Fox Home Entertainment LLC and Sony Pictures Home Entertainment Inc. These new agreements, along with the previously-announced agreement with Warner Home Video (see blu-ray.com,
March 23), will provide day-and-date availability of movies on Blu-ray for Blockbuster's store and by-mail channels.
Additionally, these studios will provide new enhanced payment terms to Blockbuster in exchange for a first lien on Blockbuster Canada Co.'s assets. Blockbuster Canada will continue with business as usual.
"These important steps with three of the leading movie studios will continue a steady supply of top-rated movies for Blockbuster customers," said Tom Casey, Blockbuster Inc. Executive Vice President and Chief Financial Officer. "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."
Blockbuster management had previously announced "a number of concurrent efforts to recapitalize the company and assure its long-term growth and success." The company has implemented a plan that cuts operating costs by $200 million this year to preserve cash and further improve liquidity. Blockbuster is also in discussions with advisors for its bondholders related to debt recapitalization.
Only yesterday,
Home Media Magazine reported that the upcoming release of
Avatar could trigger the signature of a distribution deal between Redbox and Fox, similar to the one already in place with Warner, imposing a 28-day delay on new releases. If that happened, Blockbuster would greatly benefit from securing availability of James Cameron's movie at its stores.