Chicken Soup has been in financial trouble over the past few years and had to file for bankruptcy protection with nearly $1 billion in debt.
On June 28, Chicken Soup for the Soul Entertainment filed for bankruptcy protection in a Delaware court. The company had approximately $970 million in debt and $414 million in assets as of March 2024.
The filing allows Chicken Soup to continue operating while it works out a debt repayment plan. Its creditors include a number of well-known names, including Universal Studios Home Entertainment, Sony Pictures Home Entertainment, Warner Bros. Home Entertainment and Paramount Pictures.
Chicken Soup is the company behind the world-famous inspirational book series Chicken Soup for the Soul, which has been translated into 43 languages, published in more than 100 countries, and sold more than 500 million copies worldwide, according to the company’s website.
Chicken Soup for the Soul Entertainment ran into financial trouble after buying DVD rental company Redbox in 2022, the filing said. The deal left it with $360 million in debt, which Chairman William J. Rouhana Jr. said in the filing could have been handled if it had capitalized on the wave of post-pandemic movie releases.
But even as the film industry recovers, Chicken Soup still needs more cash to buy and distribute new content, Rouhana said. But its creditors have opposed the new loan plan, leaving the company short on cash.
This left Chicken Soup “unable to pay its suppliers for movies, and the business results did not meet the expectations of the leaders, especially with the Redbox segment.” This further caused the company’s cash flow and working capital to be lacking, making it unable to operate effectively, Rouhana explained.
The company plans to sell off the business and restructure the rest. Chicken Soup still operates about 24,000 Redbox DVD rental kiosks across the U.S. It also owns Crackle, a video streaming service that relies entirely on advertising revenue to operate.
Chicken Soup for the Soul was founded in 1993 and is best known for its inspirational book series. In addition to books, movies, television, and video streaming, it also has a line of premium pet food products. The company went public in 2017.