Blockbuster and RadioShack Announce Strategic Alliance; RadioShack Store-Within-A-Store Coming To Blockbuster Stores Nationwide.

Business & Entertainment Editors

Editor's Note: High-resolution, publication ready image of

Blockbuster Chief Executive Officer John Antioco and RadioShack

Chairman and Chief Executive Officer Leonard Roberts is available

for download at www.wirepix.com\newsphotos

DALLAS & FORT WORTH, Texas--(BUSINESS WIRE)--Feb. 27, 2001

Blockbuster Inc. (NYSE:BBI) and RadioShack Corporation (NYSE:RSH) today announced a strategic alliance that will introduce a RadioShack store-within-a-store concept inside Blockbuster locations. The intent of the alliance is to create a full-service home entertainment destination within Blockbuster, while increasing RadioShack's reach to more consumers, more frequently and expanding their distribution network.

"This alliance brings Blockbuster, the leading home-entertainment brand, together with the leading brand in consumer electronics to benefit our customers by giving them neighborhood, one-stop shopping for the best selection of entertainment and electronic products and services," said John Antioco, chairman and chief executive officer of Blockbuster. "We're combining Blockbuster's domestic customer base of 48 million active member accounts and premiere store distribution network with RadioShack's high-quality products and expert electronics sales personnel. The results will be an extensively expanded home entertainment selection for our customers and entirely new revenue streams for Blockbuster with limited capital expenditures."

"Having a retail presence in as many of the 5,000 Blockbuster stores as possible nationwide opens up a new distribution channel for RadioShack, creating an enormous opportunity for accelerated growth," said Leonard Roberts, chairman and chief executive officer of RadioShack Corporation. "Our alliance with Blockbuster provides us access to more than 3 million Blockbuster customers each day, including more women and young adults, while using a capital efficient way to expand our square footage and distribution network.

"As the nation's most knowledgeable and trusted consumer electronics retailer, RadioShack brings top-quality electronics products and an educated sales force to serve Blockbuster, one of the most respected and recognized names in home entertainment, in an entirely new way," Roberts continued.

The companies will launch Phase I of the concept in approximately 130 selected Blockbuster stores in four markets, which is planned to be followed by a Phase II nationwide rollout of the company's remaining stores in 2002. Completion of the approximate 130 stores is expected by this summer and will include the markets of Las Vegas, Nev., Norfolk, Va., Austin, Texas, and Tulsa, Okla. RadioShack's highly trained sales associates will manage the stores within Blockbuster, which will offer and educate consumers on the latest digital entertainment products including home electronics, telephony services, high-speed Internet access and emerging connectivity technologies along with other fun gadgets.

The size of the RadioShack merchandising areas will vary depending on the size of the participating Blockbuster store, but will range from approximately 600-square-foot sections to kiosks. A wide selection of RadioShack's most popular product and service offerings will be featured; however, specific inventory for the stores will be determined as the program moves forward.

Beginning with the rollout of Phase I, RadioShack will operate the store-within-a-store and pay a license fee to Blockbuster for each location. Both companies will share in the cash flow and other economic benefits.

In-store marketing campaigns and cross-promotional opportunities will be coordinated by Blockbuster and RadioShack. Both companies will work together to maximize synergies, drive additional sales and generate cost savings by managing vendor and service company relationships.

About Blockbuster

Blockbuster Inc. (NYSE:BBI) is a publicly traded subsidiary of Viacom Inc. (NYSE:VIA, VIA.B) and is the world's leading renter of videos, DVDs, and video games with approximately 7,700 stores throughout the Americas, Europe, Asia and Australia. The Company may be accessed internationally at blockbuster.com.

Viacom is the No. 1 platform in the world for advertisers, with preeminent positions in broadcast and cable television, radio, outdoor advertising and online. With programming that appeals to audiences in every demographic category across virtually all media, Viacom is a leader in the creation, promotion and distribution of entertainment, news, sports and music. Viacom's well-known brands include CBS, MTV, Nickelodeon, VH1, BET, Paramount Pictures, Infinity Broadcasting, UPN, TNN: The National Network, CMT, Showtime and Simon & Schuster. More information about Viacom and its businesses is available at http://www.viacom.com.

About RadioShack

RadioShack Corporation is the nation's largest and most trusted consumer electronics retailer and offers both on-and off-line shopping convenience. With more than 7,100 stores and dealers, RadioShack sells more wireless telephones, telecommunications products and electronics parts and accessories than any other retailer. It is estimated that 94 percent of Americans live or work within five minutes of a RadioShack store or dealer. For more information visit the RadioShack corporate website at www.radioshackcorporation.com.

This news release contains forward-looking statements relating to Blockbuster's goal to become a full-service home entertainment provider and RadioShack's goal to reach more consumers more frequently and to expand its distribution network. In particular, this news release contains forward-looking statements relating to an alliance between Blockbuster and RadioShack for the purpose of implementing a RadioShack store-within-a-store concept inside Blockbuster locations. Specific statements include, among others, statements relating to anticipated product and service offerings, rollout plans and financial results. These forward-looking statements are based on Blockbuster's and RadioShack's current intent, expectations, estimates, and projections and are not guarantees of future performance. These statements involve risks, uncertainties, assumptions, and other factors that could cause actual results to vary materially from those expressed in or indicated by them. Factors include, among others: consumer interest in, and demand for, the combined product and service offerings; the impact of competitive product and service offerings and pricing; the ability of either Blockbuster or RadioShack to terminate their agreement relating to the store-in-store concept; the ability of Blockbuster and RadioShack to effectively respond to changing consumer preferences; the ability of Blockbuster and RadioShack to reach any necessary agreements with service and product providers on acceptable commercial terms; and other factors, as set forth under the heading "Cautionary Statements" in Blockbuster's annual report on Form 10-K for the fiscal year ended December 31, 1999 and other risks indicated in RadioShack's filings with the Securities and Exchange Commission, such as RadioShack's most recent Form 10-K and 10-Q.

CEO Conference Call To Discuss The Alliance

John Antioco, Chief Executive Officer of Blockbuster Inc. and Leonard Roberts, Chairman and Chief Executive Officer of RadioShack Corporation, will be conducting a conference call with the financial community on February 27, at 8 a.m. Eastern Standard Time to discuss today's strategic alliance. To access the call, dial 800/621-5175 and enter a confirmation code of 18053088. A replay of the call will also be available until Monday, March 5 at 5 p.m. EST. To access the replay, dial 800/633-8284 domestically, or 858/812-6440 internationally. The conference code for both numbers is 18053088. The call will also be Web cast simultaneously from the investor relations section of each company's web site and will be archived through March 5.

Editor's Note: High-resolution, publication ready image of Blockbuster Chief Executive Officer John Antioco and RadioShack Chairman and Chief Executive Officer Leonard Roberts is available for download at www.wirepix.com\newsphotos