As big conglomerates looked to shed assets over the last several years, and small entertainment outfits held fire sales, distribution company,Chicken Soup For the Soul (CSSE) kept on strategically expanding.
But the Greenwich, Conn. company seems to have hit a rough patch.
The company reported a net loss of $423.7 million in the second quarter, and its stock is currently hovering at about a third of its 12-month high.
Having already delayed reporting its third-quarter earnings, company founder and CEO William Rouhana conceded to Variety that the company is having cash flow issues. This was after the Penske Showbiz trade reported that numerous indie producers have recently sued CSSE film label 1091 Pictures over non-payments.
“The company has been working to address cash flow issues and to pay our content owners,” Rouhana told the trade. “Unfortunately, this has taken much longer than anyone anticipated. We are working to address these filmmakers and their concerns.”
Variety's story includes interviews with numerous frustrated producers, who are not only seeking to get paid, but are also trying to get distribution rights back to their films from CSSE.
“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?” Tom Huang, who sold North American distribution rights to CSSE for his film Dealing With Dad, told Variety. “People like this really destroy my faith in humanity. It’s so hard.”
This isn't the first time Next TV has heard payment-issue gripes and other complaints against CSSE from indie producers.
Last year, for instance, New York producer Robert Rose, who produces, stars in and distributes syndicated half-hour weekly lifestyle series Raw Travel, complained to us that he was given wildly inflated revenue projections by CSSE when he agreed to distribute his show on the company’s ad-supported streaming platform, Crackle, back in 2021.
Rose also said that his shows were buried within the platform, and that commercial pods were haphazardly placed — sometimes in the middle of dialogue — rendering the content “unwatchable.”
Rose added that out of “high” revenue projections of $71,000 and “low” forecasts of $42,600 provided by CSSE's digital acquisitions unit, Screen Media Ventures, to feature Raw Travel on CSSE’s ad-supported VOD service, Rose recouped only $228.
Emails by Next TV to CSSE reps late Wednesday weren't immediately responded to.
Either way, it’s been a wild ride for Chicken Soup, a once sleepy self-help brand that was taken public by Rouhana in 2017.
Then the shopping started:
- In December 2020, CSSE paid $315 million to acquire AVOD unit Crackle.
- In March 2022, CSSE paid $15.6 million for indie film label 1091 Pictures.
- In August 2022, CSSE assumed around $325 million in debt to acquire troubled Redbox Entertainment.
Back in August, when it reported its Q2 earnings, CSSE pledged to cut operating expenses and hold off on acquisitions to pay down debt.
The company even set up a committee to explore a potential sale.
“There have been some inquiries that have come our way that could be pretty serious, which is why we are setting up the committee,” Rouhana told Media Play News.
