Tugg Inc., the 9-year-old do-it-yourself releasing platform, has gone out of business after a deal to sell the company fell through.
The company’s model provided for individuals to select a film, screening time and nearby theater and then spread the word. Tugg would reserve the theater, manage ticketing and ensure delivery of the film.
Pablo Gonzalez, the chief executive officer and co-founder, said in an open letter this week that Tugg had been working to be acquired by an entity that was a strategic partner to help Tugg survive as a company, but that would also allow Tugg to get caught up on all outstanding payables, and to continue to improve the quality of the service.
“We were blindsided to learn the deal died at the finish line this past Friday 1/24/20,” Gonzalez said. “Given that for the first time in that period, we knew we couldn’t meet our obligations to our team, and our partners, we had to begin steps to close our doors.”
Gonzalez told Variety, “I know people are throwing around the word ‘bankruptcy,’ but technically the company is selling its assets and dissolving. There are a couple of companies wanting to buy the technology platform, which was a best in class tool in the educational space and cinema on demand. They may be able to continue to carry the torch of what we were trying to accomplish for filmmakers until the very end.”
It’s the second closure to rattle the independent film world in the past five months. Los Angeles-based Distribber and GoDigital Inc. closed down in September after more than a decade ago of allowing filmmakers to access digital distribution platforms and to monitor their earnings in exchange for an upfront flat fee. The companies hired bankruptcy specialist GlassRatner to deal with creditors.
The news about Tugg was first reported by producer Alex Ferrari through his Indie Film Hustle site. Ferrari credited Gonzalez for being transparent about the situation.
“I have heard from some TUGG filmmakers that have been getting paid the money they are owed so I believe he’s moving in the right direction,” Ferrari said. “Unlike the Distribber management team, Pablo is not hiding in a cave somewhere, he is attempting to do what he can to rectify the mistakes that were made.”
Here’s the entire message that Gonzalez sent recently:
Dear filmmakers and colleagues,
This is a follow up to the too brief of a message sent yesterday which was an urgent attempt to provide information about the facts of what is happening at Tugg.
Over the past two years, Tugg had been working to be acquired by an entity that was a strategic partner, who would help us to not just survive as a company, but that would also allow us to get caught up on all outstanding payables, and to continue to improve the quality of our service.
We were blindsided to learn the deal died at the finish line this past Friday 1/24/20. Given that for the first time in that period, we knew we couldn’t meet our obligations to our team, and our partners, we had to begin steps to close our doors.
We started this company 9 years ago with a vision to help filmmakers and distributors reach their audiences without having to sacrifice on the quality of the experience their film deserved or the breadth of reach that their film was capable of having.
It is heartbreaking to not be able to continue in that endeavor. It took blood, sweat, and tears to get it off the ground and to keep it going until the very last moment. We know that we’ve let you down. Every former Tugg employee, director, and board member takes this weight very personally. We don’t think of these events simply as an unfortunate business circumstance. We know there are people affected behind every film, theater, or institution we worked with. And we’re doing everything we can even as we’re closing down, to settle each situation, within the realm of possibility, with each individual and entity we’ve worked with.
I know many of you have questions regarding the status of the rights for your films, money owed, refunds to customers and inventory that is currently held by Tugg. I’ll try to answer some of these questions here.
– Effective immediately, since Tugg can no longer meet its obligations, the rights to your film are released and you are able to find a new distributor.
– I will be doing my best to provide a mechanism for all that hold product inventory at Tugg, to be able to have it shipped to them. Sadly, since our financial resources are frozen, it will have to be at your expense.
– I am working to provide sales reports, and contacts for orders that haven’t been fulfilled.
– All tickets for canceled events are being refunded within 48-72 hrs.
– Tugg is in the process of selling assets of value, and as time progresses over the coming weeks and months every penny that is obtained will be destined to pay back creditors, proportionately to the amount owed. I am also working with a couple of groups that may be able to offer additional recovery of unpaid fees in exchange to be able to carry your film moving fwd.
There are no team members left at Tugg to help in settling the several open issues of the business. No one is earning a salary and it is just me doing my best to communicate and take care of as many tasks as possible that will hopefully set each of you on a new path with your films.
Some of you know me, and you know the character of the team. Over the past couple of days, I’ve mainly focused on ensuring each team member has their basic needs covered in this transitional phase of their career/life. They are family to me. They cared deeply about each of you. I couldn’t imagine a better group of people to work within these past years as their loyalty and work ethic is not something that translates through in a resume.
I couldn’t have expected to find such amazing people. I ask that you please be kind to them, as none of this is their fault and they’ve fought hard always to serve you as best they could.
I will do my best over the coming weeks to send updates on the status of the company, and I apologize in advance for all the messages I can’t respond to individually.
Pablo Gonzalez CEO, Co-founder