NEW YORK — Billionaire investor Carl Icahn, Dish Network and a group of debt holders were the three remaining bidders for movie-rental chain Blockbuster on Tuesday at U.S. Bankruptcy Court in New York.
The bankruptcy auction will decide the fate of the Dallas movie-rental chain and could decide whether it will survive at all. Bidding was expected to continue well into the evening. It was not clear when it would finish.
Dish chairman Charlie Ergen, who often plays it close to the vest, hasn’t disclosed what he would do with Blockbuster. A spokesman for the Douglas County-based satellite-TV company declined comment Tuesday.
One analyst has speculated that Ergen may leverage Blockbuster’s content licensing agreements to eventually offer an over-the-top-video service similar to Netflix.
Ergen referenced the service, which delivers movies and TV shows over a broadband connection, as a way to generate more revenue from existing customers during an earnings call with analysts in February.
“There’s certainly over-the-top video, there’s certainly broadband, there’s certainly other ways to get cash flow out of existing customer relationships you have,” Ergen said.
What’s clear is that Ergen believes the pay-TV business model is changing and that maintaining the status quo won’t work long term. Dish was the first provider to cut a deal to incorporate Google TV into its service.
“I probably spent the last three years trying to understand where I think things are going to go, and I feel pretty comfortable now,” he said. “I think I know where this thing is going now.”
After several rounds of bidding Tuesday, the last bid by the group of debt holders called Cobalt Video Holdco — $308.1 million — was deemed the best when the courthouse closed for the day. The auction was continuing at law firm Cadwalader Wickersham & Taft, where the proceeding was closed to the public. Another bidder, SK Telecom, dropped out after two rounds of bids.
The auction is expected to be complete before a sale approval hearing scheduled for Thursday.
