An auditor for Blockbuster is uncertain whether the rental giant can last for the foreseeable future, according to an SEC filing.
The business jargon states that Blockbuster may not be able to continue "as a going concern" — in other words, without the threat of being liquidated.
Blockbuster is relying on an amended $250 million revolving term and loan agreement with J.P. Morgan and other lenders that matures on September 30. Certain conditions must be met in order to get that credit, and Blockbuster is not sure that it can do so.
"Our future viability is dependent on our ability to execute these plans successfully or otherwise address our liquidity shortfall," the filing says. "If we fail to do so for any reason, we would not have adequate liquidity to fund our operations, would not be able to continue as a going concern and could potentially be forced to seek relief through a filing under the U.S. Bankruptcy Code."
Last month, Blockbuster had warned that its auditor might raise doubt over the company’s ability to survive, but in this filing, Blockbuster says even the amended credit agreement might not be enough. As of early January, the company was carrying $780.9 million in debt. In the filing, the company points a finger at the economic downturn (and, previously, bad movies), saying lower than expected revenues make it even harder to fulfill debt services.
Basically, the demise of a once-dominent rental chain could be closer than you think.
I know there are readers here that have ill feelings about Blockbuster — and I’ve been avoiding the chain myself lately — but movie watchers will suffer without the company’s presence. Netflix just upped its Blu-ray fees. It would be a shame to lose an alternative.
23 Comments
You don't have to drive, it's easy to browse looking for a good film with all the filters they offer, you get customer reviews and you can get some hellacious deals! Especially from vendors listed at Amazon that are independant sellers.
I just got a new widescreen DVD of The Dark Knight for $7.43 shipped no tax. To rent this at BB for 5 bucks and have to drive there and back would be crazy. The Dark Knight will be called a "New release" at BB even next year. LOL
- guest
- Posts: 15284
- Posted on: 08 Apr 09 01:42
- guest
- Posts: 15284
- Posted on: 08 Apr 09 01:43
In our area we used to have a load of good independent DVD rental stores, And a few fairly biggies too, Global Video being the chain we used, all are now gone due to the underhanded competition practices of Blockbuster, now there is no-one left, no competition to drive prices down, so I went into my local BB store at Christmas to see what they were charging, £4.25 for an overnight DVD rental of their latest movie releases.
To get that into perspective on many of the new DVD releases for the bigger movies, our local Morrisons sells them for around £7 - £9, James bond for example was £7, Indianna Jones £8, Mamma Mia £8 and so forth. Who in their right mind would pay £4.25 to rent it overnight when they can pay £3-£4 more to keep it?
Greedy trash like that deserve to go out of business!
Local library - Free
Blockbuster/Hollywood video = History
- guest
- Posts: 15284
- Posted on: 08 Apr 09 16:20
- guest
- Posts: 15284
- Posted on: 09 Apr 09 01:46
What we need is an independant that cares about all movies.
If I were not in business already, I should love to try and make it survive
Your thoughts please?
Carl
- guest
- Posts: 15284
- Posted on: 09 Apr 09 01:50
- guest
- Posts: 15284
- Posted on: 09 Apr 09 19:37
- guest
- Posts: 15284
- Posted on: 11 Apr 09 06:15
- guest
- Posts: 15284
- Posted on: 11 Apr 09 11:03
Netflix doesn't own stores and operates solely through rent by mail so that eliminates much of the overhead costs that Blockbuster incurs. A person getting 4 new rentals at Blockbuster can get a month subscription to Netflix so the option is no brainer.
The expanding use of technology is demanding that companies to become more innovative or fail.
- guest
- Posts: 15284
- Posted on: 11 Apr 09 11:05
Netflix doesn't own stores and operates solely through rent by mail so that eliminates much of the overhead costs that Blockbuster incurs. A person getting 4 new rentals at Blockbuster can get a month subscription to Netflix so the option is no brainer.
The expanding use of technology is demanding that companies become more innovative or fail.
- guest
- Posts: 15284
- Posted on: 11 Apr 09 23:49
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