Leading position in video rental; and Strong worldwide brand recognition. Significant concerns regarding liquidity and near-term refinancing risk; Poor industry fundamentals; Highly competitive home entertainment industry; Dependence on decisions made by movie studios; and Highly leveraged capital structure. The ratings on Blockbuster Inc. reflect Standard&Poor's Ratings Services' concerns regarding its near-term liquidity position, its participation in the declining video rental industry, an extremely competitive home entertainment market, its dependence on decisions made by the movie studios, and a highly leveraged capital structure. The rating also indicates that the company is vulnerable to default. Standard&Poor's expects sales are likely to fall significantly over the next 12 months, but margins may improve as the company continues to execute
