Comment un homme a pillé Redbox et a fait faillite

Transcription originale en anglais. Titres, résumés et FAQ traduits. Narration complète disponible via les sous-titres YouTube dans votre langue.

1 033 personnes ont perdu leur emploi le jour de la mort de Redbox. Les kiosques de location de films rouge vif qui se trouvaient autrefois devant presque toutes les pharmacies et épiceries d’Amérique ont été fermés du jour au lendemain. Les travailleurs ont été licenciés sans indemnité de départ ni salaire final pour le travail qu'ils avaient déjà effectué. Et lorsque certains d'entre eux sont allés faire exécuter une ordonnance ou consulter un médecin, ils ont découvert que leur assurance maladie avait été résiliée, alors même que les primes étaient toujours déduites de leur salaire. L'argent avait été retiré. Il n'avait tout simplement jamais été envoyé à l'assureur. Un juge fédéral chargé des faillites a examiné la situation et a déclaré, je cite : « Je trouve cela écoeurant.

Ce soir, l'histoire de la façon dont Redbox, une marque que presque tous les Américains utilisaient autrefois, a été achetée par une entreprise qui l'a endettée, l'a drainée via une structure qui versait à son propre président dix pour cent de chaque dollar entrant, puis s'est effondrée si complètement que 24 000 kiosques ont été laissés abandonnés là où ils étaient, boulonnés dans le béton, pour que Walgreens et Walmart les arrachent à leurs propres frais.

A company doesn't usually die like this. Most bankruptcies are slow. This was a looting. So tonight, the question this channel always asks: when Redbox collapsed, who actually got rich, and who got the bill? The answer is a thousand workers who never got their last paycheck, and a chairman whose family business walked away intact.

To understand what happened, you have to understand that Redbox was already dying when somebody decided to buy it. And that somebody knew it.

Redbox was born in 2002, of all places, inside McDonald's. It started as an experiment in automated convenience, a vending machine for DVDs. Within a few years it was spun out, picked up by a company called Coinstar, the people behind those coin-counting machines in supermarkets. By 2013, Redbox was everywhere. More than 43,000 kiosks across the country. At its peak, roughly half of every physical disc rented in the United States went through one of those red boxes. A dollar or two a night, returned the next day. It was simple, it was cheap, and for about a decade, it printed money.

If you are old enough, you remember it. The red glow at the front of the store. Standing there in the cold, scrolling through the touchscreen while your ice cream melted in the bag, trying to decide between two movies because the second one was technically free if you returned the first by nine the next night. For a whole generation, Redbox was just part of the texture of American life, as ordinary as the soda machine or the lottery terminal. That is exactly why its ending is so jarring. This was not some obscure company. It was a fixture, and it was gutted from the inside while no one was really watching. And the man who would end up running it had already taken one company into bankruptcy before.

And then streaming happened. Netflix, then Hulu, then Disney, then everyone. Why drive to a drugstore and rent a disc when the movie was already sitting on your television? The numbers tell the whole story. In 2019, Redbox brought in about 858 million dollars in revenue. In 2020, that fell to 546 million. By 2021, it was down to 288 million dollars, a drop of two-thirds in just three years. Losses were doubling. The kiosks were emptying out. Anyone looking at this business could see exactly where it was headed.

In September 2016, the private-equity firm Apollo Global Management had bought Redbox's parent company for about 1.6 billion dollars and run it for several years. In 2021, Apollo took Redbox public through a SPAC, a blank-check shell company, rolling its ownership into publicly traded stock rather than cashing out. So when the next buyer arrived, Apollo was riding the stock down, not walking away with a bag of cash.

That next buyer was a small company with an unusual name: Chicken Soup for the Soul Entertainment. Yes, the same brand as the inspirational books. Its CEO and chairman was a man named William Rouhana. And in August 2022, his company bought Redbox in an all-stock deal valued at around 375 million dollars, while taking on hundreds of millions of dollars in Redbox's existing debt.

On paper, there was a story. Combine Redbox's kiosks with streaming, build a free, ad-supported video service, and turn a dying DVD company into a digital one. It was the kind of pitch that sounds reasonable in a boardroom. The problem was the math. The combined company would have needed to nearly double its revenue to make the debt work. Instead, revenue kept falling. Chicken Soup for the Soul Entertainment had strapped itself to an anchor and jumped into the water.

But here is where this stops being a simple story about streaming killing DVDs. Because while the company was sinking, money was flowing out through a structure its chairman had built to guarantee it would, regardless of whether the company ever turned a profit.

Here is the structure, and it is the heart of this story. According to the short-selling research firm Hindenburg Research, which published a detailed warning about the company before it collapsed, William Rouhana controlled about 96.8 percent of the company's voting shares. He didn't just run it. He controlled it almost completely. And the company was set up so that entities Rouhana controlled were paid roughly ten percent of its gross revenue. Not ten percent of profit. Ten percent of every dollar that came in the door, through license and management fees that flowed upward to the parent Chicken Soup for the Soul brand, the one he and his wife own.

Think about what that means. It means the company could lose hundreds of millions of dollars, and the people at the top would still get paid, because their cut came off the top line, before profit, before payroll, before the lights. It was a structure that rewarded extraction regardless of whether the business survived.

And this was not hidden. Hindenburg laid it out publicly. They also pointed out something else: this was not Rouhana's first company to go bankrupt. Years earlier, he had run a telecommunications company called Winstar, which collapsed after the dot-com crash. The warning signs were on the table for anyone willing to read them.

So watch what happened as the company died. In 2023, Chicken Soup for the Soul Entertainment lost 636 million dollars. Six hundred and thirty-six million, in a single year. And in that same year, entities controlled by William Rouhana took 18.4 million dollars out of the company in fees. The lenders later went further. In bankruptcy court, the investment firm HPS, which had lent the company hundreds of millions, alleged that Rouhana had been paid roughly 27 million dollars in management fees since the acquisition, and said there was a credible basis to hold him personally liable. The company was hemorrhaging money, and the fees kept flowing.

By early 2024, the end was visibly close. The company was carrying more than 560 million dollars in debt. It had entered forbearance with its lenders, which is the corporate equivalent of begging the bank not to foreclose yet. In the first quarter of 2024 it lost another 53 million dollars, and entities Rouhana controlled pulled out roughly 9 million dollars more in fees and dividends.

And then came the part the judge would call sickening. Starting in the middle of May 2024, the company kept deducting health-insurance premiums from its employees' paychecks. But it stopped sending that money to the insurer, Anthem. The workers had no idea. The deductions showed up on their pay stubs exactly as before. But the coverage had been quietly cancelled. People went to the pharmacy, went to the doctor, and discovered they had no insurance, while they were still paying for it.

On June 11, 2024, Rouhana dissolved the company's entire board of directors, except for himself. There was now no one left to stop him. Days later, payroll was missed entirely. On June 24th, he stepped down as chief executive. And on June 28th, 2024, Chicken Soup for the Soul Entertainment filed for Chapter 11 bankruptcy. It listed 970 million dollars in debt against just 414 million dollars in assets, and only 4.9 million dollars in cash. The company that once handled half the disc rentals in America had less money in the bank than a single well-run restaurant.

Chapter 11 is supposed to be a reorganization, a chance to restructure and survive. This company didn't get that chance. On July 10th and 11th, the bankruptcy judge, Thomas Horan, converted the case to Chapter 7. That means liquidation. The end. Everything sold for parts. And it was in those hearings that the judge, learning that health premiums had been taken from workers and never paid to the insurer, delivered the line: I find it sickening.

Now look at the full receipt. Who got the bill.

First, the workers. 1,033 employees were terminated, most of them the day the case converted to liquidation. No severance. They were collectively owed about 3.5 million dollars in back wages, 2.2 million dollars in health benefits, and nearly 600,000 dollars in retirement contributions, money taken from their checks that may never be fully recovered.

Second, the studios that supplied the movies. Universal was owed 16.7 million dollars. Sony, 9.1 million. The BBC, another 9 million. In a liquidation, unsecured creditors like these are last in line, and there was almost nothing left.

Third, the retailers. Those 24,000 kiosks didn't disappear. They were 900-pound machines bolted into concrete outside Walgreens, Walmart, Kroger, and thousands of other stores, and they were now dead weight. Walgreens alone reported spending 184,000 dollars a month just on the electricity to power kiosks that no longer worked, and had to go to court for permission to remove them at its own cost.

And fourth, the customers. Roughly 40 million people had used Redbox over the years, and their data, rental histories, email addresses, partial payment information, was left sitting on the hard drives of abandoned kiosks, with no plan to erase any of it. Security researchers later pulled years-old rental records straight out of machines left in parking lots. There was no plan for the kiosks, no plan for the data, no plan for anything. The company that built a network spanning tens of thousands of locations had no money left to even turn it off properly. Some of the machines were eventually hauled away. Others were sold off as oddities, hundred-dollar collector pieces of a company that used to be everywhere.

So who got rich? The fees that entities Rouhana controlled collected on the way down, the 18.4 million in a single losing year. His son's two consulting companies, which had been paid 95,000 and 100,000 dollars. And the brand itself: Chicken Soup for the Soul, the publishing business that Rouhana and his wife own, was a legally separate company. It survived the bankruptcy untouched. The week the entertainment company collapsed, the publishing side said it was business as usual. The losses stayed with the company that died. The valuable name walked away clean.

After the collapse, the Chapter 7 trustee filed suit against Rouhana, his wife, and the parent company, alleging mismanagement and what he called pillaging by insiders on a scale rarely seen with public companies. Eleven former employees filed their own lawsuit, using the word Ponzi scheme to describe the web of entities. Those are allegations, claims in court that still have to be proven. But the basic facts underneath them are not in dispute. A dying business was bought with borrowed money. Ten percent of its revenue was routed to the people at the top regardless of profit. The fees kept flowing as the losses mounted. And when the money finally ran out, it was the workers, the ones who had their insurance taken from their own paychecks, who paid the price.

Was this just incompetence, a bad bet on a dying industry? That is the kindest version. But incompetence doesn't explain why the fees kept flowing while the company lost 636 million dollars. It doesn't explain dissolving the board right before the collapse. A company that is genuinely trying to survive does not drain itself on the way down. Redbox didn't simply die. It was emptied out, and then left in the parking lot.