DISH Wins Bankruptcy Auction, Buys Blockbuster Assets For $228M In Cash

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DISH Network this morning announced that it was selected as the winning bidder in the bankruptcy court auction for substantially all of the assets of Blockbuster, which went belly up in September 2010.

DISH’s winning bid was valued at approximately $320 million, but after adjustments for available cash and inventory and others, the company expects to end up paying approximately $228 million in cash to acquire Blockbuster.

Yesterday, DISH Network’s bid was worth $307.1 million (or $308.1 million, depending the source).

Other bidders included billionaire Carl Icahn, a major Blockbuster shareholder and bondholder, and a consortium of existing Blockbuster lenders led by Monarch Alternative Capital. South Korea’s SK Telecom was also a bidder but dropped out earlier.

A sale-approval hearing is scheduled for Thursday.

DISH says the transaction is expected to close in the second quarter of 2011, although its completion is contingent upon satisfaction of certain conditions, including bankruptcy court approval.

Here’s how Tom Cullen, EVP of Sales, Marketing and Programming for DISH Network, pitches the deal:

“With its more than 1,700 store locations, a highly recognizable brand and multiple methods of delivery, Blockbuster will complement our existing video offerings while presenting cross-marketing and service extension opportunities for DISH Network.

While Blockbuster’s business faces significant challenges, we look forward to working with its employees to re-establish Blockbuster’s brand as a leader in video entertainment.”

Established in 1998, DISH currently serves more than 14.1 million satellite TV customers.