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R.I.P. Blockbuster Express?

6 Feb, 2012 By: Erik Gruenwedel

Non-transferable Express license agreement — already disputed by Dish Network-owned Blockbuster LLC — implies end of the franchise

Blockbuster Express, the high-profile disc rental competitor to Redbox founded and operated by NCR Corp., apparently is coming to an end.

NCR, which owns and operates 10,000 Express kiosks under a disputed license agreement with Blockbuster LLC, said the $100 million acquisition agreement with Coinstar-owned Redbox effectively transfers all assets of its entertainment business (read: rental kiosks) to the No. 1 kiosk vendor.

The deal includes a five-year manufacturing and services contract whereby NCR is guaranteed at least $25 million whether or not Redbox utilizes it.

Left out of the deal was the actual Express license agreement, which is non-transferable, according to a NCR spokesperson. With NCR exiting the disc rental business, the Express franchise would appear to be dead going forward.

“Once the deal is completed, NCR will have no need for the Blockbuster license,” NCR spokesperson Jeff Dudash confirmed. “NCR will be out of the owner-operator business in entertainment.”

When asked how the transaction affects Dish Network, NCR CEO Bill Nuti said it didn’t.

“This deal is with Coinstar/Redbox, and as we complete this transaction and we exit the owner-operator part of the business, as such it would terminate our relationship with Dish and Blockbuster,” Nuti said.

Marc Lumpkin, spokesperson with Dish/Blockbuster, said the Express license agreement was terminated with NCR last summer — a position denied by NCR at the time. The two sides now are in litigation concerning the matter.

Nuti said the litigation does not transfer with the asset sale to Redbox. Instead, he said, it ceases to exist.

“It’s gone. It’s over,” Nuti said.

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