Redbox owner Chicken Soup for the Soul files for bankruptcy

Richard Drew/AP

Chicken Soup for the Soul Entertainment executives ringing the opening bell at Nasdaq in 2017.

New York

The parent company of Redbox, the specialty red-colored stores that sell or rent DVDs at grocery stores, has filed for bankruptcy after months of financial struggles.

Chicken Soup for the Soul Entertainment (CSSE) has revealed in a filing that it is nearly $1 billion in debt and owes millions of dollars to a number of entertainment companies including the BBC and Sony Pictures, as well as retailers from Walmart to Walgreens.

The filing shows the company took on about $325 million in debt following its purchase of Redbox from private equity giant Apollo Global Management in 2022. The plan was to make it an entertainment conglomerate that would combine the DVD rental business with its free streaming services, such as Crackle, a once Sony-owned entertainment platform.

These plans did not come to fruition, as a twin strike in Hollywood limited the production of new content and also reduced the number of people renting physical DVDs, forcing rival Netflix to abandon this part of its business last year.

CSSE declined to comment.

Deadline previously reported that Redbox has not paid employees in a week, and medical benefits have been suspended. Filing for Chapter 11 bankruptcy could help the company fix those issues if its plans are approved by a Delaware court.

The company's publishing arm, which publishes the ubiquitous self-help books that were once a worldwide phenomenon, has not been affected by the bankruptcy filing of its entertainment unit.

The number of Redbox kiosks has grown to nearly 34,000 across the U.S., located primarily at grocery and drug stores. Since its launch in 2002, Redbox has rented out more than 1 billion of its discs at prices cheaper than cable, according to its website.

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