Fact Check: Did Blockbuster Turn Down Chance to Buy Netflix for $50 Million

Netflix may be the world's largest provider of home entertainment today, but before the rise of the top-rated content platform and ensuing streaming services, Blockbuster ruled the market.

An upcoming original Netflix documentary takes a look at the last remaining Blockbuster in Bend, Oregon, and the demise of the home video rental company.

The Claim

Netflix's preview of "The Last Blockbuster," poised for a March 15 release, drew excitement online as users noted the irony of Blockbuster's former nemesis dropping a documentary about the company.

Some users offered an alleged piece of corporate history, saying that Blockbuster turned down an opportunity to purchase Netflix for $50 million.

The Facts

When Netflix launched in 1998, Blockbuster already had a 13-year grip on the video rental industry, which Netflix hoped to improve with a rent-by-mail service, according to a 2019 profile published by The Guardian.

Netflix struggled in its early years but soon began growing its subscriber base through free trials and deals that skyrocketed its popularity. Co-founder Reed Hastings details the company's startup days in his book, "No Rules Rule: Netflix and the Culture of Reinvention," in an excerpt on Marketplace.org.

Netflix's growth eventually landed Hastings and co-founder Marc Randolph at a table with former Blockbuster CEO John Antioco and other top executives. While Netflix was growing its subscriber base, it was losing more than it was making, and the co-founders were eager to sell, Hastings said in the excerpt.

A member of the Netflix communications team told Newsweek that Blockbuster declined to purchase Netflix for $50 million in 2000. In a March 2021 letter to shareholders, Netflix said the company had reached 200 million subscribers. As of the close of the market Thursday, Netflix had a market cap of more than $231 billion, according to Yahoo Finance.

In Randolph's book "That Will Never Work: The Birth of Netflix and the Amazing Life of an Idea," and Hastings' book, the entrepreneurs recounted Antioco declining their $50 million offer, The Guardian reported.

According to the excerpt on Marketplace.org, Hastings and Randolph left Blockbuster's offices crestfallen, and a 2013 article from Variety recounting the botched deal quotes a former Blockbuster executive: "We had the option to buy Netflix for $50 million and we didn't do it. They were losing money. They came around a few times."

Responding to Newsweek and other outlets' reports on this story, Antioco, who initially declined to comment in March 2021, reached out to Newsweek in January 2022 via a PR representative to recount his version of events.

The former Blockbuster CEO asserted that there were never any serious acquisition talks with Netflix in 2000, and pointed to his LinkedIn post, where he shares additional details.

In the post, Antioco confirms that the Netflix team did indeed visit Blockbuster to "discuss a potential business arrangement and apparently offered to sell their company for $50 million."

"I was not a part of that meeting, although I did stop by to greet our guests, as was my custom. I'm not sure why others have sensationalized this story, but it just didn't happen their way. In the end, it doesn't appear that anyone, including Netflix, felt their company was worth $50 million at that time," he concludes.

The Ruling

True.

Both Netflix co-founders document that they offered the company to Blockbuster for $50 million in 2000. Blockbuster declined, though its CEO denies that any serious discussions took place. Netflix is now worth about $231 billion.

Update 02/02/22, 12 p.m. ET: The article has been updated with comments from the former Blockbuster CEO John Antioco, who reached out in January 2022 with his own version of events.