People of a certain age, especially 90s kids, may remember Chicken Soup For the Soul books from their youth, but the company is more than a line of self-help literature. They branched out into streaming and the declining video rental business by acquiring toys no one else wanted – Crackle and Redbox – for hefty sums.
The brand experienced a subsequent surge in stock prices and consumer optimism a few short years ago, but unfortunately, the bottom is beginning to fall out, creating financial hardships and clients who feel like they were lied to. Unpaid filmmakers doing business with CSSE through its studio, 1091 Entertainment, are suing for breach of contract.
Director Julia Kots, whose film Inez & Doug & Kira was purchased by 1091 for streaming in 2020 as part of a five-year profit-sharing deal, said to Variety that CSSE/1091 never cut her a check. “I decided to go with 1091 because they were known at the time for their transparency with filmmakers,” Kots said.
“They have a web-based portal where the filmmaker can log in and see all the stats — where the film plays, how much it earns each month,” she explained. Owed over $3000 based on her numbers, Kots filed a small-claims suit and sent a letter of termination complete with a cease-and-desist order.
“Their stock is in the toilet,” Kots added. “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.”
Indie filmmaker Tom Huang also signed a contract with 1091 stipulating a guaranteed $20,000 advance and profit sharing. He signed over distribution rights to his film Dealing with Dad which was released on multiple streaming platforms and VOD last year, but has earned Huang no revenue.
“We were on a carefully laid path to make our money back for our investors who trusted us, only to have a company like Chicken Soup come in, buy out our distributor, and then refuse to pay us what we are contractually owed, all for what?” he asks. “People like this really destroy my faith in humanity. It’s so hard.”
Others like Jonathan Wysocki in the case of his film Dramarama are fighting being unpaid as well as trying to get their distribution rights back. This entails taking their movies down from various VOD services. “On December 4, I had to reach out platform by platform and send cease and desist letters,” Wysocki said. “My next step is figuring out how I get all this money I’m owed.”
Corey Goode has been emailing CSSE employees about payment for his film Cosmic Secrets to no avail. “Throughout all of this, they have been selling and making money off of our films while not paying us,” Goode said.
“These big corporations in the entertainment industry count on the fact that indie filmmakers can’t afford to fight a long legal battle. We (filmmakers) are not sleeping well at night. We don’t know how to pay bills,” he added.
When reached for comment by Variety, Chicken Soup CEO Bill Rouhana issued a statement outlining his company’s “cash flow issues.” “The company has been working to address cash flow issues and to pay our content owners,” he said. “Unfortunately, this has taken much longer than anyone anticipated. We are working to address these filmmakers and their concerns.”
Their main concern is getting involved in bankruptcy litigation if it comes to that for CSSE. Kots, for one, is seeing momentum in her favor, but it’s a pyrrhic victory. While her film was taken off Chicken Soup-owned platforms, she received an email informing her “Per section 11.2 of your attached agreement, you do not have the right to terminate this agreement.”
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