A Blockbuster Deal in Offing
By George Anderson
Viacom is looking to sell its 82 percent stake in Blockbuster video to focus on its core media business, and that’s just fine with Blockbuster’s chief executive, reports USA
Today.
John Antioco, the chief executive officer (CEO) of Blockbuster said, “The exploration of Viacom’s options could be appropriate at this time.”
Viacom’s willingness to part with Blockbuster comes as no surprise amid rumors the media company was concerned about the 8,700 store video chain’s future growth prospects.
Mr. Antioco dismissed the whispers. “If Viacom is pursuing such options, it’s not because of problems with our business. We have said, and our results prove, that presumed threats
to our business have been overblown while the promise of our business continues to be understated.”
Potential suitors for Blockbuster include the rival video chain, Hollywood, and a number of buyout firms.
Moderator’s Comment: What is the best-case sale scenario for Blockbuster? What are your thoughts on the future of the video rental business?
On the surface, the easy answer would be Hollywood, but the chain has its own issues with which to deal.
Earlier in the week Hollywood Entertainment (parent company of Hollywood Video) announced that its video rental revenues were below expectations and it
was going to have to put a hold on its plan to open 100 new Game Crazy stores for each of the first three quarters in 2004. [George
Anderson – Moderator]