DISHbuster?

Alright. I’ve given it 24 hours, and let it roll around in my brain, and I
am still completely baffled by DISH’s $320M bid for Blockbuster.

I’m not alone either. Not only has the AV Twitterverse been gobsmacked, even
Wall Street analysts whose job it is to cover DISH don’t know what to think.
So far, the most positive analyst reaction I’ve seen could be characterized
as “ambivalent.”

Unlike the Da-Lite, Chief, and Sanus merger that Gary Kayye blogged about
the other week, where the stars clearly aligned and the whole deal made
perfect sense on every level, this is the exact opposite of that.

On the one hand DISH is wise to be looking for other avenues of content
delivery; everybody else is too, and broadcast is only one piece of the
puzzle. But what does Blockbuster bring to the equation? Bricks and mortar
locations? Come on. On demand streaming services? Frankly, if Blockbuster
had a competitive solution they wouldn’t be in bankruptcy now. Like many
others I really, really want to see the pitchbook that DISH’s M&A advisors
put together to sell the idea to them.

All of that aside, if I can point to only one indicator that this is a bad
idea it would be to say two words: Carl Icahn. Like six degrees of Kevin
Bacon, a huge number of poor M&A deals in the last ten years share something
in common: Icahn’s fund was in play on them. From AOL/Time Warner to the
Microsoft/Yahoo debacle, to Circuit City (which, incidentally, Blockbuster
at one point bid on), it’s quite a list of head-shakers. Whether you’re a
Private Equity firm or a large corporation looking for acquisitions, you’d
be well served to look at what properties Icahn’s fund is showing an
interest in, and steering clear of them.

The risk I’m running with this blog post is being proven wrong. Generally I
try to avoid being the guy who says “that will never happen.” As we all
know, the line between genius and madness is a fine one, and the greatest
success stories often come from taking enormous risks that have huge
potential upside. And yet while I hate the word “synergy” I just don’t see
any here at all.

Will DISHbuster be a success or a disaster? I guess we’re going to find out.