Chicken Soup for the Soul Entertainment appoints new CEO after filing for bankruptcy
Troubled US-based AVoD streaming company Chicken Soup for the Soul Entertainment (CSSE) has appointed a new CEO, having filed for Chapter 11 bankruptcy protection late last month.
Bart M Schwartz has replaced William J Rouhana Jr as CEO at the company, which entered Chapter 11 on Friday June 28. It had revealed in late April it would likely be forced to file for bankruptcy unless it could sell all or parts of the business or raise new capital.
Schwartz, founder and chairman of Guidepost Solutions, is also one of three new members added to the board, alongside Steven Goldsmith and Josh Mandel.
Guidepost Solutions specialises in domestic and international investigations, compliance solutions, monitoring and security and technology consulting.
According to its 10-K regulatory filing with the Securities and Exchange Commission in April, CSSE posted a net loss of US$636.6m in 2023, up from US$111.3m the previous year. In total, it had an accumulated deficit of about US$884.3m at the end of 2023.
The Connecticut-based firm, which owns AVoD services including Redbox, Crackle and Chicken Soup for the Soul, as well as the AVoD and DVD rental business Redbox, said it is unable to pay various debt and lease agreements.
This came after CSSE acquired several companies over the past five years, including 1091 Pictures, Crackle, the assets of Sonar and AVoD and DVD rental business Redbox.
The company said the acquisitions have required time-consuming and expensive integration efforts, which, to date, have “not been successful as we have not realised the anticipated benefits of such acquisitions and our operations have been adversely effected.”
CSSE cited the Redbox merger, which closed in 2022 and included the assumption of US$359.9m in debt, as causing the greatest amount of financial distress.
According to CSSE, Redbox has not generated enough cash since the merger to justify the level of debt, which in turn has affected its other businesses.
In 2023, net revenue climbed 16% to US$294.4m, compared with US$252.8m the prior year. Within that, VoD and streaming revenue fell 28% to US$104m, retail revenue grew 66% to US$11.8m and licensing and other revenue grew 91% to US$77.6m.
CSSE’s financial situation has been precarious for more than a year, prompting the formation of a special committee last summer to examine strategic options.
CSSE’s inability to pay its creditors has led to multiple lawsuits, with the latest 10-K filing revealing it has ongoing lawsuits with the BBC and Universal City Studios.
