July 17, 2024

The Health

Your health, your choice

Redbox Reportedly Fails to Pay Employees & Stops Health Insurance

Last week, Chicken Soup For The Soul, the parent company behind Redbox, Crackel, and the streaming service by the same name, announced that the entire board of directors and board of managers of each subsidiary of the Company other than William J. Rouhana, Jr., have been fired. This comes as a holder of more than 75% of the voting power of the company used his stock holdings to lay off the Company’s board of directors.

The company missed a $4 million payment to NBCUniversal as a part of its settlement over unpaid royalties. Now, it faces a possible order to pay all of the $16.7 million it owes NBCUniversal as questions about the future of the company grow. This comes after NBCUniversal sued, saying Redbox had not been paying royalties. It agreed to a payment plan but has now missed the first payment.

Now it has been reported by Deadline that the company has failed to pay employees for almost a week and health insurance has been canceled. Employees where at first told pay would just be a day or two late bu tnow employees have not been paid and the company has stopped updating them on what is happening.

Health insurance was also canceled back on May 14, 2024, with no word on when it will be restored. Bonuses and 401(k) matches had also been suspended at the very end of 2023.

Chicken Soup For The Soul is in a tough situation after acquiring Redbox in 2022 for $50 million in stock and an assumption of $325 million in debt. Add on top of that a shaky media environment with cratering ad revenue and quarterly losses, and the company’s future is very much in the air. In August, CEO William J. Rouhana said that the company was holding a strategic review to evaluate its opportunities, which is business speak for putting itself up for sale.

Chicken Soup for The Soul last year announced that it was in active discussions for a potential sale back in October of this year but so far nothing has come from these talks.

Like many media companies, they have likely been impacted by a soft ad market that has negatively impacted revenues. For a company that heavily relies on ad-supported streaming, this market has to negatively impact the service. Right now, the company seems confident that they will be able to work through these issues and pay their partners. For now, we will have to wait and see what happens.

Chicken Soup for The Soul has not replied to our request for comment at the time of this posting.

Please follow us on Facebook and for more news, tips, and reviews. Need cord cutting tech support? Join our Cord Cutting Tech Support Facebook Group for help.


link