New York – Chicken Soup for the Soul Entertainment, the parent company of popular DVD rental service Redbox, recently filed for Chapter 11 bankruptcy protection due to financial struggles and mounting debts. The filing, submitted in Delaware bankruptcy court, revealed that the company has accumulated nearly $1 billion in debt after facing consistent losses in recent quarters. With over 500 creditors, including industry giants like Sony Pictures and Warner Bros, Chicken Soup for the Soul finds itself in a precarious financial situation.
According to the bankruptcy filing, as of March of this year, the company had approximately $414 million in assets but owed a staggering $970 million in debts. The public company has witnessed its shares plummet by more than 90% over the past year. The mounting debt and financial woes have forced Chicken Soup for the Soul to seek bankruptcy protection as it navigates through its financial challenges.
Despite its acquisition of Redbox in 2022 and hopes of creating a successful entertainment conglomerate, Chicken Soup for the Soul continued to face losses as debts mounted. The acquisition of Redbox also brought along the assumption of the rental service’s reported $325 million in debt, further adding to the financial burden of the company. With approximately 27,000 kiosks across the U.S., down from 36,000 at the time of the Redbox acquisition, Chicken Soup for the Soul faces the challenge of restructuring its operations and finances amid the bankruptcy filing.
In response to inquiries, Chicken Soup for the Soul declined to comment, citing the unwillingness of lenders to cooperate with refinancing efforts. The company’s foray into ad-supported streaming services, including Redbox Live TV and Crackle, a streamer acquired from Sony, was intended to diversify its entertainment offerings but has also faced challenges amidst its financial struggles. As the company navigates through the bankruptcy proceedings, the future of Redbox and Chicken Soup for the Soul remains uncertain.