The parent company of Redbox, known for its iconic red kiosks at grocery stores that sell and rent DVDs, has filed for bankruptcy after months of financial difficulties.
Chicken Soup for the Soul Entertainment (CSSE) disclosed in a filing that it is burdened with nearly $1 billion in debt, owing millions to several entertainment companies, including the BBC and Sony Pictures, as well as to retailers like Walmart and Walgreens.
Filings indicate that the company incurred about $325 million in debt following its acquisition of Redbox in 2022 from private equity firm Apollo Global Management. The goal was to transform Redbox into an entertainment conglomerate by combining the DVD rental business with its free streaming services, such as Crackle, formerly owned by Sony.
However, these plans were thwarted by dual Hollywood strikes that limited the production of new content and the declining demand for physical DVD rentals, which even led rival Netflix to exit that segment of its business last year.
Previously, Deadline reported that Redbox had not paid employees for a week, and medical benefits had been suspended. Filing for Chapter 11 bankruptcy could help address these issues if the court in Delaware approves its plans.
The company’s publishing arm, known for producing the popular self-help books that were once a global phenomenon, is not affected by the bankruptcy filing of its entertainment unit.
Redbox kiosks have expanded to about 34,000 locations across the US, primarily at grocery and drug stores. Since its launch in 2002, Redbox has rented out 1 billion discs at prices cheaper than cable, according to its website.
