BOCA RATON, Fla. — Blockbuster Entertainment Corp.’s joint venture with Virgin Retail Group Ltd. won’t dilute the retailer’s earnings, according to Blockbuster chairman and chief exec Wayne Huizenga.

Last month, Blockbuster announced it had entered into a joint venture with London-based Virgin to open music retail “megastores.” The stores will sell recorded music, computer software, video and board games. There will be no video rentals at the Blockbuster Virgin Megastores.

Terms of the venture, 75% owned by Blockbuster and 25% by Virgin, weren’t disclosed.

Huizenga told Dow Jones that the venture will add 1 cents to 2 cents a share to Blockbuster earnings over the next two years.

Through the first nine months of 1992, the Miami-based company reported net income of $ 96.9 million, or 53 cents a share, compared with $ 64.6 million, or 39 cents a share, for the same period a year ago.

Huizenga told Dow Jones that before the announcement of the music venture, analysts had forecast Blockbuster to increase earnings by 25% to 30% over the next couple of years; the chairman didn’t dispute the projection. “Now, with the music, it’ll be higher,” he said.

The Blockbuster chairman said the company has $ 1 billion worth of free cash flow, much of which could be ticketed toward growth in the music business.

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