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June 12, 2001

Blockbuster Bartering $460 Million In Coupons To Settle Late-Charge Lawsuits

The video chain, Blockbuster, a publicly traded unit of New York's Viacom, last year earned about 19% of its rental income from late fees. Some $795.8 million out of $4.16 billion.

The video-rental chain denied any wrongdoing in a class-action lawsuit, and will stick to its current policy on late fees, but is offering to give out coupons with a total value of $460 million.

Under the proposal, members who were charged the late fees at one of Blockbuster's 7,700 stores will automatically receive certificates when they rent videos. (Blockbuster is also picking up the $9.25 million in plaintiff's attorneys fees and expenses.)


Cinnabar To Develop Barter4Golf.com

Cinnabar Enterprises (OTCBB: CINN) in cooperation with Cinnabar's Corporate Trade Division, BarterOne, and the Links Group, announces their involvement to develop Barter4Golf.com.

The new interactive web site will promote barter opportunities currently available within the golf industry including: green fees, cart rentals, lessons, league play, tournaments, and related merchandise.

For current BarterOne account holders, visitors to the e-commerce site will have the opportunity to reserve tee times online, book hotel rooms, and make other associated purchases.

The site will be actively marketed to business owners who are not currently clients of a barter company, enjoy golf, and are interested in trading their company's products or services for desired tee times.

Additionally, corporate clients can explore meeting and convention options available through barter. Steve Buss, Cinnabar's network administrator, has been designated as lead developer for the project. For more information contact him at: sbuss@barterone.com, or call toll free at (843) 824-1435.


National Football League About To Hit "Pay-dirt"
Barter Plays Prominent Role In Final Payoff

The NFL's old internet deal with the ESPN Internet Group was worth approximately $10 million over three years. How times have changed! The league expects to do a landmark deal with one of three companies the NFL is
in advanced negotiations with (AOL Time Warner, Viacom, or sports site SportsLine.com an affiliate with Viacom's CBS network).

The five-year deal is a complicated one, to manage the league's web properties. One of the reasons for the high value attached to the NFL web rights is the tight grip the league has kept over its digital prizes--an enormous library of online video.

Bottomline, the league expects to get $100 million this time around in cash, plus an additional $200 million to $250 million in "non-cash" value, which will include promotional placement across the media companies' various platforms and the service of producing the NFL's web site.



Here And There. . .

  • PricewaterhouseCoopers reports that financial results for this year's second quarter will be the worst for the lodging industry in a decade--since the third quarter of 1991.

    In 1991, a famously bad year for hotels, the industry lost $5.7 billion. It's not expected to be as bad this time around, as the debt picture is better today. (In 1991, 11-cents of every hotelier's dollar went to pay
    debt, today it's 3.8-cents.)

  • Airline miles, a $70 billion dollar "currency," continues to expand outward by moving into markets well beyond the airlines. For example, WebMiles Dining Program enables members to use their card at 7,500 participating restaurants nationwide...receiving 5 airline miles for each dollar spent. (Members can register up to three credit cards, details at www.webmiles.com.)

  • Wire One Technologies is bartering for the assets of Lucent Technologies' GeoVideo Networks venture, trading 815,000 common shares and warrants for the purchase of an additional 500,000 shares.

  • CMR of New York, a company that tracks ad spending (television, magazines, newspapers, and other media outlets), reports that total spending on advertising, across all media, in the U.S. fell 5.2% to $22.6 billion in the first quarter ended March 31st.

    The spending figures are an important signal to both Wall Street and Madison Avenue, as both scrutinize advertising trends which are regarded as an important measure of economic health. (Companies often slash their ad budgets when they miss their sales or profit targets.)

  • The VC (Venture Capital) industry is bracing for what may be its worst year in nearly three decades. The marketplace is seeing investors that specialize in providing late-stage financing driving very hard bargains, as their risks have risen sharply.

    For example, the late-stage investors are insisting on senior status if the company is wound down or sold, i.e. they will get all their money back before any earlier investors see a penny.

    (Investors are also seeking the right to maintain their percentage of ownership in the company, even if they don't choose to invest in the next round.)

  • Globalization is quietly taking place by workers from many third-world nations coming to industrialized nations, where they work and then send part of their salaries to their homelands.

    Such efforts are increasingly a powerful force in the world economy. More than $13 billion is sent out of the US alone, making America the world's largest source of remittances.

  • Magazine sales at the newsstands are hurting...only 35% of magazines shipped by publishers are actually being sold. Magazine consultant Harrington Associates says that newsstand sales for 2000 was the worst year ever. Newsstand sales, which account for about 23% of magazine unit sales, are a crucial industry measure of a title's vitality.

 

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