Dish Network would benefit from an extension to determine which of Blockbuster's 1,500 store leases it wants to keep, the rental company reported in a filing with the U.S. Bankruptcy Court yesterday.
Earlier this month, Dish Network announced that it had agreed to acquire Blockbuster for $228 million, after adjustments were made for cash and inventory. Under the terms of the deal, the companies were required to finalize the acquisition yesterday. If that didn't happen, Dish would have been required to pay a $500,000 fine per day to Blockbuster until the deal is finalized.
But due to Dish's inability to quickly determine which of the 1,500 leases it wants to keep in place, Blockbuster's motion (PDF), if approved by the court in a hearing on Tuesday, would allow the satellite provider to extend its decision time for 90 days without penalty.
Since announcing that it would acquire Blockbuster, Dish has made it clear that it doesn't plan to shutter all of the company's stores, though it hasn't said how many it will keep open. The company's executive vice president of sales, marketing and programming, Tom Cullen, also said earlier this month that Dish wants to "re-establish Blockbuster's brand as a leader in video entertainment," without offering details on how it will go about that.
Bringing Blockbuster back to its former glory might be difficult. Regardless of who owns the company, Blockbuster is facing serious challenges in the rental market, as Netflix and Redbox continue to steal customers. Moreover, Blockbuster's video-streaming service has yet to even come close to matching Netflix's option in overall popularity.
Of course, all that isn't news to Dish. Cullen acknowledged that Blockbuster "faces significant challenges" in a statement accompanying the acquisition announcement earlier this month. And soon enough, it will be up to Dish to overcome those challenges.