Blockbuster Filing For Bankruptcy In September

Blockbuster told Hollywood studios that it’s planning to file for bankruptcy in mid-September.

The home video rental retail chain wants to use the time to restructure its $1 billion debt and get out of the leases on at least 500 of the crappiest-performing of its 3,424 stores.

They think they can turn things around by doing more with its Redbox-style DVD kiosks and increasing their attention on this crazy new-fangled thing called the “Internet.”

Blockbuster’s stock was delisted from the NYSE last month. It closed Thursday at $0.11.

Blockbuster tells Hollywood studios it’s preparing for mid-September bankruptcy [LAT via Movieline]

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  1. PeteWa says:

    Sweet! My BlockBuster photo used again :)

  2. Loias supports harsher punishments against corporations says:

    This isn’t the first time is it? I thought they had done this within the last year.

    If only this were the end – but they will restructure and limp on.

  3. Warren - aka The Piddler on the Roof says:

    Yeah, are they going to be ‘gone’ gone? As in, ‘cease-to-exist’ gone? Or are they just buying time between visits from the grim reaper?

    There are a few other companies I’d love to see go away for good: certain airlines, banks, oil companies, automakers, telecommunications companies, big box stores and cable companies.

    Give a shout people. Who would you like to see go away for good? And don’t be a killjoy with the whole “It’s never good when people lose their jobs” thing. Pretend all the workers will find wonderful new jobs and focus on who you’d like to see just go away.

    • Riroon13 says:

      I’ll bite.

      Best Buy and Sirius/XM.

      • hansolo247 says:

        Actually, with Sirius/XM, they gave me a $23 deal per 5 months twice, so 10 months total. I’ll stick with it.

        Thing is, pre-merger, it was $10 a month. Now it is $13 a month, plus the BS performance fees that shoots it all up close to 20 a month after all the BS.

        • dvdchris says:

          I got a $20 deal for 5 months and the rep said as long as I call back before the five months ends I can keep doing that.

      • Griking says:

        I love my Sirius.

    • FrugalFreak says:

      S+Bears-B

    • MeowMaximus says:

      Sears / K-Mart
      Best Buy
      Most of the Airlines
      Chase
      Comcast
      Target
      Apple

      • Darury says:

        Have to say, I’m shocked. You include SearK-mart AND Target, but not Wal-Mart?

        From my perspective, K-Mart ceased to exist years ago

        • MeowMaximus says:

          Good point, I did overlook Wal Mart -
          and let me add Radio Shack to the list – which is sad, because they were once great.

      • Cyniconvention says:

        I wanted to be first to say Apple, but I’m glad I’m not alone!

    • redskull says:

      How about if I’m a killjoy and ask where the frak we’re supposed to shop if every store you disdain goes away?

      The next thing to go away will be clothing stores, because soon no one will have any reason to ever leave their homes, and won’t need anything to wear outside.

    • mattarse says:

      Blockbuster – I hate this company and hope they go completely under

    • Griking says:

      Gamestop

    • marsneedsrabbits says:

      Blockbuster. I want them to sink like a stone.

      I’ve been waiting for Blockbuster to go belly up since 1989.
      That was the year they caved to over-the-top religious people and refused to carry Martin Scorsese’s The Last Temptation of Christ.

      To this day, you can’t rent it in their stores.

      It will be worth the 21 year wait.

      http://www.pbs.org/wgbh/cultureshock/flashpoints/theater/lasttemptation.html
      Last paragraph

      • dvdchris says:

        Incorrect and PBS should do better research. You can certainly rent or buy it in many Blockbuster stores. The CEO in charge when that decision was made hasn’t been there since 1997 and many of the inane buying decisions like that stopped when he left.

  4. tedyc03 says:

    $0.11 a share? Shit, that’s cheap wallpaper!

  5. Bativac says:

    Oh, Blockbuster. You are done. Don’t drag us all thru the uncomfortable spectacle of watching you suffer slowly thru the bankruptcy and reorganization process.

    I’ll always remember renting Ghostbusters from you, once a month, from age 9 to 11. I will also remember you screwing me on late fees many years later.

    • INsano says:

      Unless there are changes in management there isn’t much point in reorganizing. If they didn’t see their business model as a failed and dying one…

      Case in point: Netflix app hitting all Apple devices this week with streaming video.

      Talk about the polar ends of the management vision spectrum.

      • dvdchris says:

        There is about 40% of the population that has no interest in watching a movie on a cell phone or downloading movies on the internet. Blockbuster will continue to remain relevant to that segment of the population until they die off.

  6. Daverson says:

    This news makes me shed tears.

    Of laughter.

  7. WickedCrispy says:

    I can’t wait for Gamestop to eat it.

    http://www.penny-arcade.com/images/2007/20070330.jpg

    • Southern says:

      I probably wouldn’t hold my breath on that one anytime soon — they’re still profitable. They reported $40 million earnings in the 2nd quarter.

      Now, if Walmart goes through with its plans to get involved in the used games market, then Gamestop might be in trouble — but at least at the moment, they’re going to be the last B&M left that will be renting games, and that should increase their market share considerably.

  8. sonneillon says:

    I knew I should have shorted their stock. But they won’t give me a margin account.

    • SonicPhoenix says:

      So buy put options instead. No margin needed.

      • hansolo247 says:

        Yea, but you do have to do some work to be able to buy derivatives with many brokerage companies.

        Not a lot, but some. Usually questionnaires.

      • sonneillon says:

        I generally do not like options and while it is silly to never consider a put option I just never considered it. To me derivatives are really great hedging mechanisms, but as an investment vehicle to me they are more akin to gambling than speculative investing which I suppose is also gambling. Still I should have considered put options it just didn’t cross my mind.

  9. Big Mama Pain says:

    I am surprised that video game rental wouldn’t keep them in the game at the very least. Aren’t they the only place you can rent video games from?

    • Loias supports harsher punishments against corporations says:

      Uh, where have you been?

      • Big Mama Pain says:

        You could reply with an answer as opposed to snark, right? Obviously I don’t know, or I wouldn’t have asked the question ; )

    • Southern says:

      RedBox is testing Video Game Rentals in some places (like around Austin Texas), but yeah, BB is pretty much the last Brick & Mortar that you can rent video games from.

      GameFly has pretty much killed off brick & mortars tho. Why pay $6.95 for a couple days when you can pay ($13?) for a whole month?

    • samonela says:

      Yeah but they don’t rent SNES games. That’s a deal breaker for me.

    • SilentAgenger says:

      Hopefully it means the return of the smaller independent “mom ‘n pop” video stores that thrived before Blockbuster put them out of business.

  10. coren says:

    With Hollywood Video already dead and gone and Blockbuster circling right on after them – where does that leave brick and mortar rental at?

  11. jrwn says:

    How do I become an exec in this company. The only way to go is up and if it all fails, you can blame the last president… err board members.

  12. David in Brasil says:

    Here’s my BB “Glad You’re Gone” story: About 10 years ago, my wife rented some movies from them. She lost one of them. About 8 months later or so, it turns up, and I return it (yeah, I probably slid it into their night box). anyway, a few months later, I go into BB to rent a movie. The manager comes out during my checkout to tell me that I can’t rent anything else there until I pay a huge late fee; something like $70. I pointed out that they got their movie back, and although they may have lost out on a couple rentals while they replaced the lost one, their cost was nothing close to $70. I told the manager he could either rent me the new movies or I wasn’t ever coming back, but either way, there was no way I was going to pay them $70. He chose not to have my business, and now, 10 years later, I see that I’ve finally forced them into bankruptcy. Ahh, it feels good when you can do that!

    • coren says:

      It doesn’t matter how much money it cost them (and if it was a popular movie, it was probably more than 70 bucks over 8 months – that’s less than ten a month, and that doesn’t even factor replacement). It matters that when you rent it, you agree to pay that fee.

    • syzygy says:

      The manager doesn’t want to “do business with” a deadbeat who keeps a copy of a movie he doesn’t own for 8 months and then tries to shirk the late fee he agreed to when he signed up as a member? Imagine that.

  13. jwissick says:

    Die you f**ker! DIE!

  14. zandar says:

    If blockbuster did survive and end up with a net presence, I wouldn’t trust them with my credit card number. I can just imagine the dozens of little charges for violating this term or that condition.

  15. Sajanas says:

    I wonder how this will affect the 28 day waiting period some of the studios imposed on Netflix and Redbox. It was my understanding that they were doing this at least in part to help Blockbuster survive by having the newest releases as much as it was to encourage people to buy DVDs. Maybe the death of Blockbuster will encourage the studios to invest in better streaming systems.

    • Stickdude says:

      “Maybe the death of Blockbuster will encourage the studios to invest in better streaming systems.”

      Thanks. I needed a good laugh this morning. As if the death of Blockbuster wasn’t funny enough.

    • Warren - aka The Piddler on the Roof says:

      You know, if (and this is a BIG ‘if’) Hollywood starts making movies that are actually worth seeing, and if I had a nice home theater at home and I could stream movies, I’d have no problem paying $5 bucks (or more) to watch them in my own home via streaming. But since A) Hollywood produces almost nothing that doesn’t suck nowadays and B) I don’t have a decent home theater yet or streaming, whether or not the studios adopt a better streaming option is irrelevant to me.

      I’m just glad Blockbuster will soon be truly and most completely dead.

      • Southern says:

        For the number of movies that we watch, at $5 each, I’ll stick with Redbox or Netflix.

        If they’d match Redbox’s rental price ($1.00-$1.50) now, depending on the area), I’d be more willing to pay it.

        • tiatrack says:

          Blockbuster’s version of Redbox is also only $1

          • hansolo247 says:

            That’s NCR, not Blockbuster.

            They bought the right to put Blockbuster on the machine, but it is not Blockbuster. The whole thing is a NCR expansion push. Makes sense given their expertise with these kinds of machines, when you think about it.

            • pc95 says:

              If you’re like many people who live in a metropolitan area, libraries still rule. There is such a treasure trove of people dumping their Dvd’s to libraries in addition to branches actually able to pull-in new releases, why would anyone pay for the immediacy of watching a movie? It’s not like the movie catching a movie that’s a few years old hurts or improves the content. Save your money for groceries or the internet bill and take advantage of your local/state taxes you’re paying.

              • SilentAgenger says:

                If that works for you then I’m happy…unfortunately it doesn’t work for me. Why? Because I live in an area filled with dishonest jerks who used to check out DVDs from the library and then never return them. I say “used to” because the library got so fed up with these jerks that they chose to stop offering DVDs altogether.

    • dvdchris says:

      It will free up money allowing them to advertise the 28 day window. The movie studios still want to sell their movies to Blockbuster.

  16. balderdashed says:

    I can’t think of a company more deserving of bankruptcy. Anybody remember their deceptive “No Late Fees” marketing scheme in 2005, which led to investigations and charges of misrepresentation in almost every state? This, after a major lawsuit three years earlier over exorbitant late fees, which cost them millions in attorney’s fees and refunds. I’d been bamboozled and stung by their deceptive policies a few times before vowing to never set foot in a Blockbuster again, and signing up for Netflix. Their inevitable demise will be a cause for celebration — I’m thinking champagne and, of course, popcorn.

  17. almightytora says:

    And nothing of value was lost.

  18. MeowMaximus says:

    Blockbuster failed to move with the times, and this is the inevitable result. In my experience, they had crappy customer service any way, which, with their ridiculous late fee structure, no doubt contributed to their downfall.

    Now I’m hoping they don’t get a government bailout…

  19. Stickdude says:

    Am I the only one surprised to learn that they still have almost 3,500 stores out there?

  20. redskull says:

    I won’t miss Blockbuster for different reasons than most: everything they carried was always the latest Hollywood crap, no classics or offbeat titles, and they specialized in carrying full-screen only versions. The only time they had any widescreen DVDs in their stores was when that was the only way it was released.

    Hollywood video occasionally had more offbeat titles in addition to the popular dreck, and most of their stuff was widescreen.

    • Skyblacker says:

      Eww, fullscreen! Icky!

      Even back when 4:3 televisions were the norm, I still wanted my movies in the original aspect ratio. I didn’t mind letterbox format — I wanted that picture full frame as nature intended!

      And now you have people watching fullframe content on widescreen tvs, picture stretching like silly putty to fill the entire screen. How anyone can care enough to upgrade to a new television but not notice such a distorted picture is beyond me.

    • ARP says:

      You need to go to a locally owned video store or use Netflix to get indie films. Blockbuster used to carry them, but then thought there’s more money to be made carrying 100 copies of Tranformers, rather than 2 copies of Zombieland.

  21. aja175 says:

    bai…

  22. Gruppa says:

    I have a feeling the one in my area will be one of the last ones to go when/if they scuttle all remaining stores. It’s been there for 20 years, and I even worked there 18 years ago right out of high school.

    It was actually kind of fun. I used the employee rentals to rent every single Genesis and Nintendo game we carried at the time. They also used to rent out the auditorium at Knotts for training all the SoCal senior employees on new promotions and whatnot. Then we could enjoy the rest of the day at the park. Good Times.

  23. Destron says:

    This does not surprise me. I worked in their distribution center about 6 years ago in McKinny Texas, the only one in the country that serves stores. They were in the middle of spending $32 Million to add on to it so they could process more movies in a shorter time. Even then I could see how short-sided they were because even I could tell that was a huge waste of money.

  24. Starfury says:

    The local blockbuster (Newark, CA) is closing. Selling everything off. I feel bad for the people that work there but that’s about it. We haven’t rented/bought from there in years. We use Redbox for our video needs.

  25. potatomandan says:

    Let’s hope they don’t get a bail out too. And boo hoo about people losing their jobs. How about all the family run stores that were put out of business when Blockbuster opened up? No one gave a crap about them.

  26. Nummerkins says:

    It’s about time. The Blockbuster by me had a liquidation sale and shut its doors. Same thing happened to the one in my old neighborhood about 10 miles away.

  27. CBenji says:

    I guess I will be the odd person out as I still have my blockbuster account, and the store that is closest to my house is swamped all the time. I have had Netflix before though and just signed with them again so I can try their streaming service. It is only a matter of time that will be all I have if their streaming service is worth anything. I live in Northeast PA, and I am always surprised by how busy they are.

  28. Trick says:

    I saw a new Blockbuster KIOSK at a Vons near my home. One machine was already broken and the other machine stated very clearly you had to return the video to same location. Normally that wouldn’t be a problem but why bother when I know I can pickup a RedBox flick near my home and return it near my work…

  29. Minneapolis says:

    Though I loathe blockbuster and haven’t set foot in a store since 1997, if they were to close up shop completely it would be a HUGE blow to the national real estate market. Strip malls all across the country are hurting, and blockbuster has been pretty danged reliable for sucking 2000-3000 square footage in these shopping centers.

    It’s like a Walgreens suddenly ceasing to exist — lots of ‘For Lease’ signs will be going up.

  30. lillym says:

    I think there are 3 left in my city (population roughly 250k). I’m not sure I know that the ones closest to the college campuses have closed.

    But I also noticed the local grocery chain switched from RedBox to Blockbuster kiosks.

    Although one of the locally owned video rental stores everyone kept predicting would succumb to Blockbuster is still going strong.

  31. dg says:

    YES! Finally I get to piss on their grave! Now if they’d just totally give up the ghost and just DIE a horrible death, we can all move past this bad dream of a company…

  32. Grrrrrrr, now with two buns made of bacon. says:

    And…..I’m playing the worlds tiniest violin.

  33. P_Smith says:

    Lackluster Video strikes out (or goes down, your choice) for the third time. Good riddance.

    They’ve got no one to blame but themselves – not the economy, not the competitors’ practices, not the changing marketplace. Lackluster’s demise is due solely to their greed and mistreatment of the customers.

    It’s yet another example of what happens when it becomes large: customer service becomes an afterthought, not the purpose of their business as it was when they started.

    .

  34. bigtxpapa says:

    This better remove the 28 day or longer waiting period on Netflix and Redbox! In my area other than Redbox I dont have another rental place with 25 miles with Blockbuster closing. Netflix is ok but never knowing what will or wont be delayed and Netflix seems to have an issue getting Extended Versions of movies. Although Blockbuster sucked it up I had a nice $25 three out at a time (unlimited rentals for the month) in store deal going. I could watch all three and go back and get three more plus it was only 8 blocks away. I averaged 40-50 movies a month and I sure cant get that from Netflix. Well Crap, gotta figure out a new way now!

  35. Eagle_020 says:

    I saw the writing on the wall many years ago.

    Anyone remember a place called Discovery Zone? When my son was young, it was his favorite place in the world. I liked it because he could work up a sweat actually DOING something rather than just passively watching TV or playing a video game. Even in the winter or during bad weather. They did a booming business…..until taken over by Blockbuster. Once the genius executive management of BB got their fingers in the DZ pie, it headed downhill fast. Until Discovery Zone just ceased to be a year or two later.

    I never had any dealings with BB video. The nearest location to me was further away than 4 other video stores, so I never bothered joining. But watching them drive DZ into oblivion told me all I needed to know.

  36. Mercutio_Jones says:

    Here’s my Blockbuster story.

    I had a late return in 1998 and just figured it was no big deal, I’d pay the late fee next time I rented from them. About three weeks later, I get a vaguely threatening letter stating I’d better pay soon or the debt would be turned over to a collections agency. The amount in question? $2.99. Two dollars and ninety-nine pennies. I was a little miffed to be threatened with collections over less than three dollars after just a few weeks. I gathered together the BB cards in the house and took the letter along with two hundred and ninety-nine pennies to my local store, canceled my account, and have never darkened the door of their business again.

  37. infected says:

    Ahhh, it’s a wonderful day.