informed employees of the filing late Friday […] that it had filed for a debtor-in-possession loan — a way for companies that are reorganizing after filing for bankruptcy to secure additional working capital to meet payroll. […] employees have been waiting for paychecks since June 21st […] it’s not certain that the company will be able to secure such a loan.
Chicken Soup took on $325 million in debt when it acquired Redbox in 2022 and has since been sued over a dozen times over unpaid bills.
Sad to see this for two reasons:
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Physical discs and the rental model have always been a fallback against oppressive streaming licensing, and with so few video rental stores left it Redbox was the last one standing.
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It sounds like they missed payroll for their workers. No worker deserves to have their finances thrown into chaos because an employer can’t manage their books.
One of the few good legal standards around bankruptcy is that unpaid wages to workers are actually, surprisingly paid out of assets prior to investors getting their cut.
I’ll agree that’s a good thing, but that depends on there being assets (likely in this case), but it also means workers may have to wait months or years before the bankruptcy proceedings are complete. That shouldn’t be a burden lower wage workers have to shoulder.
No and in a classic capitalist paradise, in the US state DOLs/BOLIs have emergency funds out of which they pay workers wages. For the capitalists who couldn’t. Privatize the gains, socialize the losses. Learned about that when a regional Thai restaurant chain went under, declared bankruptcy and then the state paid their workers. So messed up. Such a great reason to get corporate shielding so your “personal” gains aren’t subject to clawback.
Corporate law has to change, but unlikely as things are.
You can buy discs online.
Literally said “and rental” and was talking about rentals. Buying discs online isn’t much of a competition with streaming. Rentals are much more appealing for most media consumption as compared to purchases which are typically reserved for specific titles (often which were initially rented) where repeat viewing is intended. I liked physical rentals for quality and reliability. Certainly won’t switch to purchasing though now that redbox is going under.
Buying is at least enough that we should still get bluray pirate releases
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The biggest revelation to me is that Chicken Soup for the Soul owns Redbox and Crackle. Just odd.
Yet another example of leveraged buyouts being bad and dumb. The “risk” may be technically on the company you’re buying’s books but it’s really on the employees who actually face the real consequences of the bet failing.
Without the buyout, the company would have failed even earlier. Doesn’t help the employees either.
wait they paid 325 millions in 2022 for Redbox???
Why???
How they thought they could have a return on that investment??!
They have 38,000 kiosks. So that’s ~$10k/kiosk.
Honestly, that may be a fair price, assuming these machines are profitable. Vending machines make $4-10k revenue/year. Assuming that holds for RedBox, that should make >$2k profit per year, which would make aquisition reasonable. The question is, is that what they’re getting?
If I were in their shoes, I’d expand the options at the kiosks to include console games, and maybe a limited selection of snacks (e.g. popcorn), if it can be retrofitted.
Imagine that: some scammy motivational speakers who have been peddling a bunch of feel-good bullshit for decades didn’t know how to fix a company that was hemorrhaging money with warm thoughts and regards.
I would have taken that bet.
this is bad because a lot of rural and lower income places depend on redbox for entertainment
But it’s good news for the Crash 'em Up Derbies!
If only Redbox had 4k blurays I’d probably have used them more, but I know that’s probably way too niche.
