8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported) September 14, 2009

BLOCKBUSTER INC.

(Exact Name of Registrant as Specified in Its Charter)

DELAWARE	001-15153	52-1655102
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

1201 Elm Street Dallas, Texas	75270
(Address of principal executive offices)	(Zip Code)

(214) 854-3000

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 7.01 Regulation FD Disclosure

On September 14, 2009, Blockbuster Inc. (the “Company”) announced its intention to implement a proposed amendment of its credit agreement and an extension of its Term Loan B Facility (“Term Loan B”).

The amendment to our credit agreement is expected to, among other things: (i) extend the final maturity of a portion of our Term Loan B from lenders electing to extend from August 20, 2011 to May 31, 2012; (ii) increase the applicable margin for the interest rate with respect to the extended Term Loan B; (iii) permit the divestiture of non-core international assets and planned store closures; (iv) permit the issuance of senior secured notes and the grant of security interests in the collateral for the senior secured notes; (v) add prepayment requirements with respect to the extended Term Loan B in connection with certain asset sales; (vi) amend certain financial maintenance covenants; and (vii) reduce the quarterly mandatory amortization payments of the extended Term Loan B as compared to the non-extended Term Loan B.

A lender under the Term Loan B that does not consent to the amendment will continue to be a lender under the Term Loan B but will not be subject to the extension of the maturity, lower mandatory amortization payments and the increased interest rates and the prepayment requirements in connection with certain asset sales as provided in the amendment.

The Company is furnishing additional materials herewith to disclose this information pursuant to Regulation FD.

In accordance with general instruction B.2 to Form 8-K, the information in this Form 8-K under Item 7.01 (Regulation FD Disclosure), including the materials furnished as an exhibit hereto, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or Securities Exchange Act of 1934.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Description
99.1	Domestic Store Portfolio Overview Slide
99.2	Continuing Transformation into a Multi-Channel Brand Slide

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	BLOCKBUSTER INC.
Date: September 15, 2009	By:	/s/ Thomas M. Casey
		Thomas M. Casey Executive Vice President and Chief Financial Officer

EXHIBIT INDEX

Exhibit No.	Description
99.1	Domestic Store Portfolio Overview
99.2	Continuing Transformation into a Multi-Channel Brand Slide

EX-99.1

We continue to focus on portfolio optimization opportunities by closing unprofitable stores and refocusing

efforts to improve 4-wall profitability

# stores

Annual loss aversion

Lease Termination Costs

2009 Normal Closures

280-300

$10

-

2009 Accelerated Closures

300-385

13

($39)

2010 Normal Store Closures

100-125

3

-

2010 Accelerated Store Closures

130-150

4

(21)

Total Stores Closures

810-960

$30

($60)

Revenue Transfer¹

$20-$30

Total Annual EBITDA Impact

$50-$60

Stores w/additional lease mitigation/termination efforts

275-300

Stores that may be converted to outlets

250-300

Total store closures and other actions

1,335-1,560

Domestic Store Portfolio Overview

Store Portfolio Indicators for LTM period ending July 5, 2009

Stores

By-Mail

Digital

Vending

Note: Store financial figures reflect inclusion of allocated chain-wide adjustments; excludes allocation of field management costs

1

Assumes 25% of closed store revenue is transferred to existing stores

Measures to Address Underperformers

2009 & 2010 store closures will also produce a 1-time net working capital benefit of $26M

80%

30%

(10%)

Core

Profitable non-core

Unprofitable

Percentage of Store EBITDA

Percentage of

Stores

35%

47%

18%

Avg. Store Revenue:        

Avg. Store Gross Profit:  

Avg. Store EBITDA:           

Total

Core

Exhibit 99.1

These

materials

are

not

to

be

printed,

downloaded

or

distributed.

These

materials

are

only

available

to

QIBs

and

non-US

persons

$756K

$932K

$414K

$520K

$69K

$158K

EX-99.2

Strictly

Private

and

Confidential:

These

materials

are

not

to

be

printed,

downloaded

or

distributed

Continuing Transformation to a Multi-Channel Brand

Blockbuster’s mission is to become the preferred choice for convenient access to

media entertainment -

Anytime, Anywhere

Future State

Smaller overall store base (average store

lease is 2.5 years)

Fewer large stores, more smaller urban

locations

Delivering broader customer experience

3,750 company-operated stores

606 franchised stores

Heavy focus on film

Competitors:  Hollywood, Movie Gallery

Major market presence

Profitability enhanced by product distribution

synergies with stores

497 current units

2,500 units by year end, 10,000 by mid-

2010

License model

Competitors:  Redbox

Presence in nearly every connected device

High-quality entertainment experience

Large digital library including new releases

Emerging digital platform

Embedded in millions of living rooms

through Samsung, TiVo and others

Competitors:  Apple, Amazon.com,

Comcast, TimeWarner

1.6M subscribers

Moderate multi-channel integration

Profitable

Competitors:  Netflix

Growing subscriber base

Highly profitable

Present State

Channels

Capital Intensity

High -Moderate

Low

Minimal

Moderate

Exhibit 99.2