Chicken Soup For The Soul And Redbox Sued By Partners For $3 Million In Unpaid Fees
Things are only getting worse for Chicken Soup for The Soul Entertainment. Their “cash flow issues” recently trickled down to the indie filmmakers they had under contract, and now they are having problems paying their investors.
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Cord Cutters News reports that investment bank PJT Partners is suing Chicken Soup company and media rental service Redbox for unpaid fees. PJT, who helped CSSE close the deal to acquire Redbox, seeks $3.4 million in fees they are owed “related to its work to help close” the deal.
Cord Cutters’ report adds that PJT claimed via Bloomberg they had not received payments since April of last year, which parallels claims made by content creators taking Chicken Soup to court.
The company bought Redbox in August of 2022 “for $50 million in stock and an assumption of $325 million in debt.” Their revenue doubled in the aftermath to $79.9 million on paper, but that number does not reflect Redbox’s revenue or the burden CSSE took on.
In the second quarter of 2023, they posted a loss of $43.7 million, which accounts for $1.50 a share. That was more than double the prior year’s loss of $20.8 million, which is about $1.39 a share.
Like indie director and disgruntled client Julia Kots said, “Their stock is in the toilet. They seemingly don’t care that I filed a lawsuit against them. If they were trying to raise capital or refinance, they would be negotiating to get the lawsuits dropped.”
Chicken Soup and its subsidiaries can’t fight the suits because they are backed into a corner. They are so cash-strapped that they’re looking to sell, similar to Warner Bros., though they don’t put it that way internally.
Chairman and CEO Bill Rouhana stated last summer that “the company was holding a strategic review to evaluate its opportunities.” Cord Cutters sees right through that statement, calling it “business-speak for looking at potentially selling itself.” So far, nothing has come from any motion or suspected talks.
He didn’t respond to Cord Cutters’ request for comment, but Rouhana, like many others in entertainment, blames his company’s woes on the writer/actor strikes and “cratering ad revenue.”
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