Chicken Soup for the Soul Entertainment, the parent organization of the film rental company Redbox, which is known for its unmistakable red booths, petitioned for Chapter 11 bankruptcy protection on Friday.
In the filing, Chicken Soup recorded debts of about $970 million, and complete assets of about $414 million.
Entertainment Debts
According to court filings, it owes millions of dollars to entertainment and media companies
These include Universal Studios, Sony Pictures, and BBC Studios Americas, as well as some retailers like Walgreens and Walmart.
Motivational Speakers
Chicken Soup for the Soul was established in 1993 by two motivational speakers, Jack Canfield and Mark Victor Hansen.
The organization’s motivational book series, with titles like “From Lemons to Lemonade” and “Angels Among Us,” contains assortments of stories for specific audiences, for instance, new moms or cat enthusiasts.
First Book
With the hope that it would heal readers’ souls in the same way that “chicken soup has a healing effect on the body of the ill,” it published its first book.
This was first presented more than 30 years ago and offered life tips and stories of overcoming obstacles.
Initial Success
Over 500 million copies have been sold by the company, which has published more than 300 titles.
The bankruptcy filing has no effect on the book publishing arm which is distinct from its entertainment division.
Redbox Operations
It was not immediately clear whether the Redbox business would be affected by the Chapter 11 filing.
Chicken Soup for the Soul Entertainment purchased Redbox in 2022.
Kiosks Across US
Redbox was a 2002 startup that was known for its bright red DVD rental kiosks outside grocery stores and pharmacies.
There are roughly 27,000 Redbox kiosks all over the United States.
Company Executives
William J. Rouhana Jr. became the organization’s chief executive in 2008.
He ran the organization with his wife, Amy Newmark, the publisher and editor-in-chief of the book division.
Ambitious Expansion
Rouhana attempted to extend the company into various ventures, including a line of soups, which eventually fizzled.
In 2016, he established Chicken Soup for the Soul’s entertainment division.
Payroll Difficulties
The organization mentioned its need to help pay its employees, which it has been not able to do “for the two-week period ending on June 14, 2024.”
Chicken Soup for the Soul Entertainment has around 1,000 full- and temporary employees.
Reporting Losses
In a filing with the U.S. Securities and Exchange Commission, the business reported a net income loss of $636 million in 2023, compared to a gain of $111 million in 2022.
Redbox was in debt by more than $300 million at the time of Chicken Soup for the Soul’s acquisition.
Plan Disruption
After purchasing Redbox from Apollo Global Management, Chicken Soup took on around $325 million in debt.
Its goal was to create an entertainment empire by combining the DVD rental business with its free streaming services such as Crackle.
This was hindered by both Hollywood strikes which caused constraints on the production of content.
