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Redbox’s Implosion Signals the Demise of Dying DVD Empire
Chicken Soup for the Soul Entertainment, the parent company of the once-dominant DVD rental chain Redbox, has filed for bankruptcy protection after defaulting on loans, having cars repossessed, and neglecting to pay its employees for months.
In a move that reeks of desperation, the company informed employees of the filing in an email, which was obtained by The Verge, explaining that it had secured a debtor-in-possession loan to cover payroll costs. But let’s be real, how long can they really keep paying employees when the company is drowning in debt?
The employees have been waiting for paychecks since June 21st, while the company promised to reinstate health insurance for its workers, which had been cut off in May. But now, it’s unclear whether the company can secure the necessary funds to make good on those promises.
The list of creditors Redbox owes is a Who’s Who of major Hollywood studios, retailers, and tech companies. There’s Walmart, Walgreens, Universal, Sony, Lionsgate, Warner Bros., BBC, Vizio, and Plex, just to name a few. It’s a staggering list that adds up to a whopping $970 million in debt.
It’s no secret that Redbox has been struggling to keep its head above water, having taken on $325 million in debt when it acquired the company in 2022. Since then, it’s been sued over a dozen times for unpaid bills, and settled with NBCUniversal for a whopping $16.7 million – only to miss the first payment, resulting in a court order to pay the entire balance.
The writing was on the wall, but Redbox’s executives chose to ignore the impending doom, leaving employees and creditors hanging in the balance. This is just another example of the reckless ambition and poor financial decisions that plague the entertainment industry.
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