NEW YORK, Feb. 11 (UPI) -- U.S. video rental giant Blockbuster may soon have an auction as the only strategy left to lift it out of bankruptcy, a source told the New York Post.
Creditors, including billionaire Carl Icahn and Monarch Capital, have failed to agree on a restructuring plan that can transform the company and its 5,500 stores into a viable competitor with Netflix and Redbox, the newspaper said Friday.
Blockbuster's biggest problem is the cost of running stores that cannot compete with Netflix, which delivers videos by mail and Redbox, which distributes movies from coin and credit-card operated machines set up in malls and grocery stores.
Direct downloads over the Internet provide more competition. Some companies already do that and Amazon.com is expected to introduce a video streaming business soon.
Icahn and Monarch Capital are the two most likely bidders for Blockbuster. Icahn at one point was reportedly willing to invest $200 million into the company but the offer was turned down by creditors who did not want to see their shares weakened by a large outside investment.
