The future of a once iconic video chain, Blockbuster, is officially in the hands of DISH Network.

The satellite TV service provider announced today that it was the winning bidder in bankruptcy court for Blockbuster's assets. The winning bid was for a mere $320 million. At its peak, Blockbuster had 60,000 employees and 9,000 store locations throughout the world. Competition from Netflix, Red Box and streaming movie providers has left the chain a shadow of its former self.

It filed for bankruptcy in order to slash its debt by $900 million. Overall, the company has $1 billion in debt and has struggled financially ever since Viacom spun it off in 2004.

Despite this, Dish clearly thought its assets were worth the bid. All told, the company said it expects to pay a net $228 million in cash to acquire Blockbuster at the closing which is expected to occur in the second quarter of 2011.

With its more than 1,700 store locations, a highly recognizable brand and multiple methods of delivery, Blockbuster will complement our existing video offerings while presenting cross-marketing and service extension opportunities for DISH Network, Tom Cullen, executive vice president of sales, marketing and programming for DISH Network, said in a statement. While Blockbuster's business faces significant challenges, we look forward to working with its employees to re-establish Blockbuster's brand as a leader in video entertainment.

DISH is one of the leading satellite TV providers in the US with 14.1 million customers, second only to Direct TV. While the company has yet to divulge what it will do with Blockbuster's assets, one analyst thinks he has an idea.

It is our understanding that Dish Network plans on maintaining the retail presence and will likely use the Blockbuster store fronts to cross-promote Dish Network, Nomura Equity Research analyst, Mike McCormack, wrote in a note. We could also imagine permutations where Dish Network would attempt to use Blockbuster's physical DVD inventory as currency to further the kiosk partnership with NCR.