Publishers Clearing House, known for its 'Prize Patrol' sweepstakes,
files for bankruptcy
[April 11, 2025] By
WYATTE GRANTHAM-PHILIPS
NEW YORK (AP) — Publishers Clearing House, a decades-old marketing and
sweepstakes company known for doling out large “Prize Patrol” checks,
has filed for Chapter 11 bankruptcy protection.
In an announcement this week, PCH said it was using the bankruptcy
process to “finalize a shift away” from its legacy business of
direct-mail, retail merchandise and magazine subscriptions. The company
is hoping to instead transition to a “pure digital advertising" model,
where it will continue to offer free-to-play entertainment and prizes.
The Chapter 11 proceedings, filed in New York on Wednesday, arrive amid
growing financial strain for PCH — which has struggled with rising
operational costs and changing consumer habits in recent years.
Pivoting from its old way of doing business will help the company break
free from past constraints and “establish a strong foundation for our
future," CEO Andy Goldberg said in a statement.
But that doesn't mean the famous sweepstakes are going away. PCH says it
plans to operate in a "business-as-usual manner" throughout the
bankruptcy process — noting that the “Prize Patrol” team will continuing
to deliver awards across the U.S. The company says it's lined up
debtor-in-possession financing from Prestige Capital to fund operations
through its restructuring.
PCH's roots date back to 1953 — when Harold and LuEsther Mertz and their
daughter, Joyce Mertz-Gilmore, formed a business out of their Long
Island, New York home to send direct-to-consumer mailings that solicited
subscribers for a number of magazines through one single offering.
The company later grew with chances for consumers to win money — first
launching a direct mail sweepstakes in 1967 — and expanded its offerings
to a wide variety of merchandise, from collectible figurines to
houseware and “As Seen on TV” accessories, in the years that followed.
Its in-person “Prize Patrol” team was formed in 1989.
[to top of second column] |
Jo-Ann Snyder reacts when she see's the check from Publishers
Clearing House at her home in Wilkes-Barre Twp., Feb. 23, 2018.
(Aimee Dilger/The Times Leader via AP)/The Times Leader via AP,
file)
PCH became known for surprising
prize winners with oversized checks, which was often filmed and
featured in TV commercials. In Wednesday court documents, the
company said it has awarded over half a billion dollars in prizes
and continues to attract millions of contestants today.
But its operations haven't been without financial strain —
particularly in recent years.
“While PCH’s direct mail and e-commerce programs were profitable for
decades, changing patterns of consumer behavior, costs and
competition, along with a declining pool of new prospecting names,
negatively impacted the business, resulted in losses beginning in
2022,” William H. Henrich, co-chief restructuring officer for PCH,
wrote in a court declaration Wednesday.
Henrich pointed to a handful of cost pressures — including rising
shipping and postal rates, inventory and supply chain challenges
that have continued since the start of the COVID-19 pandemic and
rising competition from major retailers today, like Walmart and
Amazon, that have dominated the e-commerce space.
PCH also faced some scrutiny from regulators who previously raised
concerns about consumers mistakenly believing that making purchases
from the company would improve their chances at winning its
sweepstakes. As a result, PCH has racked up several costly legal
settlements over the years — most recently, Wednesday's court
documents note, paying $18.5 million to resolve allegations from the
Federal Trade Commission in 2018.
As of the end of March, PCH had total assets of nearly $11.7 million
and total liabilities of about $65.7 million, court documents show.
The company currently has 105 employees and an annual gross revenue
of about $38 million.
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