Fox And Sony Throw Blockbuster Another Lifeline

Only weeks after Blockbuster signed a deal with Warner, the company has signed new agreements with Twentieth Century Fox Home Entertainment and Sony Pictures Home Entertainment. It appears that the deals with the two studios companies will be similar to the Warner deal, which ensured that studio’s new titles would be available in Blockbuster stores and by mail the day they are released on DVD.

Additionally, Blockbuster will get favorable payments terms from the studios in return for a lien on some assets involving Blockbuster Canada. So basically Blockbuster is giving them Blockbuster Canada until it pays back some loan or reverts to the normal payment terms

The struggling-Blockbuster also says that it has implemented a plan to cut operating costs by $200 million this year to preserve cash and further improve liquidity. Blockbuster is also in discussions with advisors for its bondholders related to debt recapitalization.

The Warner-Blockbuster deal was controversial because the studio had recently negotiated deals with Blockbuster rivals Netflix and Redbox to give them such access only after the movies have been available to purchase on DVD for 28 days. Warner basically screwed Netflix and Redbox.

If what happened with Warner is any indication of things to come, Netflix might end up with the short end of the stick again if Sony And Fox withold their movies from Netflix for 28 days as well.