It’s about to become much harder to get your crab and lobster fix, because one of the most popular seafood chains in America just officially went under: Red Lobster has filed for bankruptcy after blowing all of their capital on a six-hour commercial set entirely to Beatles music.
Damn. RIP, Red Lobster!
In a statement sent to shareholders yesterday, Red Lobster revealed that the company no longer had the funds to stay afloat following a short-sighted decision to pack a six-hour commercial with dozens upon dozens of exorbitantly expensive Beatles songs, which infamously cost hundreds of thousands of dollars each in licensing fees. The commercial, directed by Peter Jackson and aired uninterrupted over the course of ABC’s Sunday night primetime block, reportedly cost $16.5 billion to produce and featured over 100 recordings from the Beatles’ back catalog—including outtakes and rarities—which were played over sumptuous footage of various Red Lobster menu items being drizzled with butter or sizzling over a woodfire grill.
“The Beatles are the most universally beloved band of all time, and while their songs are expensive to license, we truly believed that the steep initial costs of padding out a six-hour commercial with their music would pay off exponentially, because if we could make the Beatles synonymous with Red Lobster, then we’d win the business of their billions of fans worldwide,” said the restaurant’s statement to shareholders, adding that they originally projected that the commercial would result in a 20,000% increase in sales. “All signs pointed towards it being low risk with tremendous upside, but the reality is that margins are razor-thin in casual dining, and though it’s hard to think of a safer gamble than the most popular rock band in human history, unfortunately, sometimes even the safest gambles can have catastrophic consequences.”
Red Lobster noted that the commercial did in fact lead to a 3% spike in sales, but this ultimately did not create enough revenue to compensate for a six-hour ad that cost $45 million per minute to produce. While the company insisted that they still stand by their decision to shoot the commercial, they admitted that in retrospect, some of the expenditures might’ve been gratuitous, such as licensing “Hey Jude” twice so they could play it layered over itself to make it sound more powerful and loud, or paying both for the Yellow Submarine album and the soundtrack to the Yellow Submarine film, not realizing they were pretty much the same thing.
This is a truly devastating—and, in hindsight, wholly unnecessary—turn of events for a restaurant chain that was actually performing fairly well financially up until this point and would’ve likely continued turning robust profits for years had the company not gone all-out on a $16.5-billion Hail Mary. While their six-hour commercial was undeniably impressive and definitely a treat for Beatles fans, unfortunately, Red Lobster went overboard with this one, and now their ship has sunk for good.