FX.co ★ Redbox Owner Chicken Soup Files For Bankruptcy

Chicken Soup for the Soul Entertainment (CSSE), the parent company of Redbox, has filed for Chapter 11 bankruptcy protection in Delaware, citing approximately $970 million in debt.

The company is indebted to numerous media corporations, including Universal Studios, Sony Pictures (SONY), and BBC Studios Americas, as well as several major retailers such as Walgreens (WBA) and Walmart (WMT).

According to the filing, CSSE secured a loan exceeding $300 million following its acquisition of Redbox in 2022 from Apollo Global Management (APO).

Subsequently, the company faced challenges in merging the DVD rental business with its free streaming service, Crackle. These difficulties were compounded by Hollywood strikes, which curtailed new content production, and waning consumer interest in renting physical DVDs, CNN reports.

In a bid to secure additional funding, the Connecticut-based company encountered resistance from its lenders, who rejected the proposed new loan facility. This left Chicken Soup "unable to pay for all the movies that were offered by their providers, and operating results failed to meet management's expectations, particularly in Redbox's kiosk rentals, resulting in insufficient cash flows and working capital to operate the business efficiently," Fortune reported.

It is noteworthy that the company's publishing unit remains unaffected by the bankruptcy proceedings.