Chicken Soup for the Soul Entertainment, the company that owns the movie rental service Redbox (famous for its red kiosks), filed for Chapter 11 bankruptcy on Friday. This means they seek legal protection while trying to reorganize their finances. In their filing, they reported having around $970 million in debt and about $414 million in assets.
Founders of Chicken Soup for the Soul
Motivational speakers Jack Canfield and Mark Victor Hansen created the first “Chicken Soup for the Soul” book. They achieved this by gathering true, uplifting stories they had heard from their audience members during their talks. Initially, major publishers in New York turned down the book, but a small self-help publisher in Florida, known as HCI, accepted it.
After the first book’s success, Canfield, Hansen, and HCI published more “Chicken Soup for the Soul” books. They later released versions aimed at specific groups. One specific new version was “Chicken Soup for the Teenage Soul,” which became a major bestseller in 1997.
In the Beginning…
The first “Chicken Soup for the Soul ” book was published in 1993. Since then, new titles and sequels have been released regularly. In 2009, it was discovered that an author had plagiarized a story called “Happiness” from “Chicken Soup for the Teenage Soul IV.”
The plagiarizing author was Adeline Lee Zhia Ern, and the author of “Happiness” was Sarah Provençal. Also, a 19-episode TV series based on the book’s stories was produced. It was aired by PAX TV (now known as Ion Television) during the 1999–2000 television season.
A New Leadership
In 2008, Jack Canfield and Mark Victor Hansen sold their company. They sold it to a new group led by William J. Rouhana and Robert D. Jacobs. Since then, all new books have been published by Chicken Soup for the Soul Publishing, LLC. It was distributed by Simon & Schuster.
Under the new leadership, Chicken Soup for the Soul branched into other products besides books. They now sell pet foods under the brand Chicken Soup for the Pet Lover’s Soul. They also developed a variety of soups, sauces, and prepared foods under the Chicken Soup for the Soul brand.
Expanding to Entertainment
In 2013, Chicken Soup for the Soul made a surprising announcement. The company announced it would start making a TV series and a movie with Alcon Entertainment. They also created TV shows with other partners, like PBS, and in 2016, they bought most of the website A Plus.
Chicken Soup for the Soul Entertainment became a publicly traded company in 2017. Later that year, it acquired Screen Media Ventures, an independent company that distributes TV shows and movies. This acquisition included Popcornflix, a free online video service supported by ads. On March 28, 2019, it was announced that Chicken Soup for the Soul Entertainment would buy a majority share of Sony Crackle from Sony Pictures Television. After the purchase, the service would return to being called “Crackle.”
Becoming Chicken Soup for the Soul Entertainment
On November 5, 2019, another announcement was made. Chicken Soup for the Soul Entertainment would buy Foresight Unlimited, a company that sells films internationally. This move enabled Chicken Soup for the Soul Entertainment to expand its new Screen Media division.
On December 15, 2020, Sony exchanged its remaining shares in Crackle for a preferential stake in Chicken Soup for the Soul Entertainment. This deal gave Chicken Soup full control over Crackle. By 2020, the Chicken Soup for the Soul series had grown to over 250 titles.
Chicken Soup for the Soul Entertainment: More Acquisitions
In April 2021, Chicken Soup for the Soul Entertainment acquired Sonar Entertainment’s film and television catalog. In return, Sonar received a 5 percent stake in a new ad-supported video-on-demand (AVOD) network featuring its library. On March 2, 2022, Chicken Soup for the Soul revealed that it bought 1091 Pictures for $15.55 million. This deal included around 4,000 movies and TV series from 1091’s collection and its free, ad-supported networks and channels.
Later, on May 11, 2022, Chicken Soup for the Soul announced plans to buy Redbox for $357 million. This amount included $36 million in stock and $321 million in debt. The purchase was completed on August 11, 2022. Reports say the recent bankruptcy filing only affects the company’s entertainment division. It also says that the book publishing part, which operates separately, is excluded. However, as of now, It is unclear if the Chapter 11 bankruptcy filing will affect Redbox.
Major Milestones: First Book and Initial Success
The company published its first book over 30 years ago, hoping it would comfort and uplift readers just as chicken soup helps to heal the sick. This book shared advice and stories about overcoming challenges. The company successfully sold over 500 million copies and released more than 300 different books.
William J. Rouhana Jr. took over as the company’s CEO in 2008. He and his wife, Amy Newmark, who was in charge of publishing and editing the books, led the organization together. Rouhana tried to grow the business into different areas, such as a line of soups, but those efforts didn’t succeed. In 2016, he started Chicken Soup for the Soul’s entertainment division.
Entertainment Debts
Court documents show that Chicken Soup for the Soul Entertainment owes various entertainment and media companies millions of dollars. These companies include Universal Studios, Sony Pictures, and BBC Studios Americas. They also owe money to some retailers like Walgreens and Walmart.
Chicken Soup for the Soul Entertainment employs around 1,000 full-time and temporary workers. But it has struggled to pay its employees.
Chicken Soup for the Soul Entertainment: Reporting Losses
According to a filing with the U.S. Securities and Exchange Commission, the business reported a net loss of $636 million in 2023, a significant drop from a $111 million gain in 2022. When acquired by Chicken Soup for the Soul Entertainment, Redbox had over $300 million in debt. After purchasing Redbox from Apollo Global Management, Chicken Soup for the Soul took on about $325 million in debt.
Their goal was to build an entertainment empire by combining Redbox’s DVD rentals with their free streaming services like Crackle. However, this plan was disrupted by Hollywood strikes that limited content production.
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