#4 | Jim Keyes: Netflix Didn't Kill Blockbuster. 2008 Did.

Blockbuster turned down Netflix for $50 million in 2000. Jim Keyes did not become CEO until 2007, and the internet still blames him for it.More on Jim Keyes and this episode: thedealtablepodcast.com/episodes/jim-keyesHe walked into a company that had already violated its bank covenants two or three times. He bought a streaming service from the studios with 3,000 titles already digitized, doubled EBITDA in twelve months, and had a two notch Moody's upgrade in hand when Lehman Brothers collapsed. Then all six studios cut Blockbuster from 90 day credit terms to cash, $300 million of float left the company in two weeks, and there was no choice but to file.As he puts it, the company was listing, not sinking, and the iceberg was the financial crisis. He beat Carl Icahn in bankruptcy court, had a scotch with him the next day, and sold the business to Charlie Ergen's Dish, which intended to bypass the internet with wireless. Before Blockbuster came 21 years at 7-Eleven, from chief technology officer to CEO, a 10x on equity value, and the 1987 buyout that left $4 billion of debt at 17 percent interest.The other half of the conversation is education. Keyes wrote Education Is Freedom, and he argues that falling college attainment is a national security issue, with China moving from 40 to 60 percent while the United States slid into the low 40s.Jim Keyes is the author of Education Is Freedom and the former chief executive of both 7-Eleven and Blockbuster. He spent 21 years at 7-Eleven, rising from CTO to CFO to COO to CEO, and took over Blockbuster in 2007. The youngest of six, he graduated from the College of the Holy Cross and holds an MBA from Columbia.KEY MOMENTS00:00 "The idiot that turned down Netflix"14:20 Education as a national security issue24:11 Six kids, a shack, then Holy Cross55:15 Blockbuster: the debt and the late fees58:03 The iceberg was 2008, not Netflix59:25 Buying 3,000 digitized titles01:01:21 Six studios go to cash, $300M walks out01:06:10 Charlie Ergen and the plan to bypass web01:08:52 Beating Carl Icahn in court01:12:37 $4 billion of debt at 17% interestNewsletter: thedealtablepodcast.com/connectLane Carrick on selling a business, The Optima Advantage: amzn.to/48nLElWInstagram: instagram.com/thedealtablepodcast/LinkedIn: linkedin.com/company/the-deal-table/The Deal Table is hosted by Ryan Harper and Lane Carrick, filmed in Dallas, and produced by Harper Belmont Media.