Blockbuster names Keyes as CEO

DALLAS - Blockbuster Inc. yesterday named James W. Keyes, former president and chief executive officer of 7-Eleven Inc., as the chairman and CEO of the struggling movie-rental company.

Keyes, 52, replaces John F. Antioco, who announced in March that he would leave by the end of the year after nearly a decade leading the Dallas company.

Blockbuster has been fighting for survival as consumers look online for movies to companies such as Netflix Inc.

"As the technology continues to evolve, it will be my job to have Blockbuster front and center as a player in those areas of technology," Keyes said.

Keyes, who was with 7-Eleven for 21 years, retired when the convenience-store chain was sold in 2005 and has since been chairman of Key Development L.L.C., a private-investment company.

In May, Blockbuster said its first-quarter loss had widened because of a soft market for movie rentals and heavy spending on its online-rental program, which now competes with Netflix.

Last fall, Blockbuster introduced its Total Access plan, which gives its online subscribers the option of returning DVDs to a store instead of through the mail to obtain another movie more quickly.

Arvind Bhatia, director of equity research at Sterne, Agee & Leach Inc., said that during Keyes' tenure at 7-Eleven, the company did well financially.

"Our first read is, this is good for Blockbuster and this is good for its stock price," Bhatia said.

Blockbuster has more than 8,000 stores worldwide, about 5,000 in the United States. The company said last week that it would close 282 U.S. stores this year, which Keyes described as a normal progression for a major retailer.

Netflix settled a patent-infringement lawsuit against Blockbuster last week, ending an attempt to slow the growth of Blockbuster's online business. Terms were confidential.

Keyes, who has a three-year contract, will receive an annual salary of at least $750,000 and a bonus of at least $500,000, according to a regulatory filing with the Securities and Exchange Commission.

Keyes also will be issued $3 million in shares that will vest in full on the third anniversary of his start date. He also agreed to buy $3 million in shares within 30 days after starting at the company.

Shares rose 15 cents, or 3.5 percent, to $4.46 yesterday.