Blockbuster Case Summary

rk Corporation (2011–present) Website www.blockbuster.com Blockbuster LLC, formerly Blockbuster Inc., is an American-based provider of home movie and video game rental services, originally through video rental shops (both owned and franchised), later adding DVD-by-mail, streaming, video on demand and cinema theater. [2] At its peak in 2004, Blockbuster had up to 60,000 employees and more than 9,000 stores. [3][4] Because of poor strategic planning, mismanagement and competition from other video rental companies such as Netflix and Redbox, Blockbuster lost significant revenue and filed for bankruptcy on September 23, 2010. [5] On April 6, 2011, the company and its remaining 1,700 stores were bought by satellite television provider Dish Network
Icahn accused Blockbuster of overpaying Chairman and CEO John F. Antioco, who had served in that capacity since 1997, receiving $51.6 million in compensation for 2004. Icahn was also at odds with Antioco on how to revive profit at Blockbuster; Antioco scrapped late fees in January, started an Internet service, and wanted to keep the company independent, while Icahn wanted to sell out to a private equity firm. [29] In 2007, Antioco left the company, reportedly due to continued controversy over his compensation. He left with a $24.7 million severance package.
However, after a due diligence review of Circuit City's financial books by Blockbuster (pushed for by Carl Icahn), Blockbuster withdrew its offer in July 2008. Analysts were not favorable to the proposed deal, viewing it as a desperate effort to save two struggling retailers rather than a bold turnaround initiative. [31] It even earned CEO James Keyes a spot on Jim Cramer's Mad Money Wall of Shame before the offer was withdrawn. Subsequently Circuit City filed for bankruptcy on November 10, 2008 and, after liquidating all of its stores, ceased operations on March 8, 2009.