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Dish Network wins Blockbuster bid, business professor says layoffs certain

Excerpt

The following is from the April 8, 2011, edition of Star Newspapers. Michael Davis, an economics professor in SMU's Cox School of Business, provided expertise for this story.

April 8, 2011

By Danny Gallagher

Dish Network may have paid a pretty penny for Blockbuster, but one business expert said it could come at a huge cost for McKinney's workforce. . .

Michael Davis, an economics and finance professor with Southern Methodist University's Cox School of Business, said even though Cobalt won't be able to take away some of the company's jobs, they should still be worried about the potential for unemployment in the coming weeks.

"I don't know how worried and I don't think anybody knows including the people at Dish," Davis said. "I think there will be some further reductions at Blockbuster."

The potential for a decrease in the number of stores operating under the brand means there could be more room for less employees at the McKinney distribution plant, Davis said.

"We have to expect at least some contraction," he said. "I could be wrong but if you cut back on the number of stores that you operate, you would think that you have to cut back at your distribution center."

The possibility for layoffs started long before Dish Network's purchase agreement, Davis said.

"In this case, I think it was clear that for Blockbuster, the business was changing and Blockbuster could not operate some 3,000 stores doing what they do," Davis said. "I think that just reflects reality."

Read the full story.

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