Blockbuster cuts Viacom credit obligation
Value owed to former parent reduced by $75 million
By Danny King -- Video Business, 10/30/2008
OCT. 30 | Blockbuster, the largest U.S. movie-rental service, and former parent company Viacom reached an agreement today that cuts the value of the amount of some of the letters of credit owed to Viacom in half, Blockbuster said in a statement today.
The value of the letters of credit between Blockbuster and Viacom, which spun off Blockbuster in 2004, was cut to $75 million from $150 million, Blockbuster said in a statement today. The agreement involved changing provisions related to Viacom's responsibility for some of Blockbuster's store leases.
The new agreement frees up more funds for Blockbuster to invest in strategies such as growing its digital content delivery business and upgrading stores.
Blockbuster's split from Viacom came a decade after the rental chain was acquired by the media conglomerate.
