The once almost everywhere Redbox has apparently hit hard times as its parent company, Chicken Soup for the Soul Entertainment, looks for a way forward. Now in 2024 Redbox is feeling a lot like Blockbuster of 2014 when it closed all its remaining stores and became a shell of its former self.
The question is with all the bad news can Redbox find a way forward? Or will Redbox become the next Blockbuster and fall victim to streaming as people move away from DVDs.
Chicken Soup for the Soul Entertainment, the parent company behind Redbox, Crackel, and the streaming service with the same name, announced that the entire board of directors and board of managers of each subsidiary of the company other than William J. Rouhana, Jr., have been fired. This comes as a holder of more than 75% of the voting power of the company used his stock holdings to lay off the company’s board of directors.
The company missed a $4 million payment to NBCUniversal as a part of its settlement over unpaid royalties. Now, it faces a possible order to pay all the $16.7 million it owes NBCUniversal as questions about the future of the company grow. NBCUniversal sued Redbox, saying Redbox had not been paying royalties. Redbox agreed to a payment plan but has now missed the first payment.
Deadline reported this week that the company has failed to pay employees for almost a week and health insurance has been canceled. Employees were at first told pay would just be a day or two late but now employees have not been paid and the company has stopped updating them on what is happening.
Health insurance was also canceled on May 14, 2024, with no word on when it will be restored. Bonuses and 401(k) matches had also been suspended at the end of 2023.
Chicken Soup for the Soul Entertainment is in a tough situation after acquiring Redbox in 2022 for $50 million in stock and an assumption of $325 million in debt. Add on top of that a shaky media environment with cratering ad revenue and quarterly losses, and the company’s future is very much in the air. In August 2023, CEO William J. Rouhana said that the company was holding a strategic review to evaluate its opportunities leading many to believe the company was going up for sale but so far no sale has come.
Last October, Chicken Soup for the Soul Entertainment announced that it was in active discussions for a potential sale, but nothing has come from those talks.
Like many media companies, they have likely been impacted by a soft ad market that has negatively impacted revenues. For a company that relies on ad-supported streaming, this market must negatively impact the service. Right now, the company seems confident that they will be able to work through these issues and pay their partners. For now, we will have to wait and see what happens.
Chicken Soup for the Soul Entertainment has not replied to our request for comment at the time of this posting.
Please follow us on Facebook and X for more news, tips, and reviews. Need cord cutting tech support? Join our Cord Cutting Tech Support Facebook Group for help.