Blockbuster Will Buy 35% Stake in Republic Pictures

In a move that gives it a toehold in Hollywood movie production, Blockbuster Entertainment Corp. disclosed Thursday that it will spend $25 million for a 35% stake in Republic Pictures.

The investment is a further move by Blockbuster, the nation’s largest video rental chain, to diversify into other entertainment-related fields. Blockbuster earlier bought 236 Music Plus and Sound Warehouse stores from Roy E. Disney’s Shamrock Holdings, and has formed a partnership with London’s Virgin Retail to build large entertainment “megastores.” It has also formed a joint venture with IBM to develop new, entertainment-related technologies.

Based in Los Angeles, Republic is an independent film and television company that has grown into one of the larger home video distributors. Its “Knight Moves” film opens today. Titles in its library include such classics as “High Noon” and “The Bells of St. Mary’s.”

The investment stems from talks first held during a Major League Baseball owners meeting last fall. Republic Chairman Russell Goldsmith is a partner and vice chairman of the San Diego Padres, while Blockbuster Chairman H. Wayne Huizenga owns the expansion Florida Marlins. With the investment, Huizenga and Blockbuster Vice Chairman Steven R. Berrard will join Republic’s board.

Goldsmith said that Ft. Lauderdale, Fla.-based Blockbuster views Republic as an investment, and it will not receive favorable treatment over other video retailers.