Publishers Clearing House, a well-known marketing and sweepstakes company famous for its iconic “Prize Patrol” checks, has filed for Chapter 11 bankruptcy protection. The company announced this week that it is using the bankruptcy process to transition away from its traditional direct-mail, retail merchandise, and magazine subscriptions business model. Instead, it plans to shift towards a purely digital advertising model, focusing on offering free-to-play entertainment and prizes.
The Chapter 11 proceedings were filed in New York on Wednesday due to financial difficulties faced by PCH, including rising operational costs and changing consumer habits. CEO Andy Goldberg stated that pivoting from their old way of business will help establish a solid foundation for the company’s future.
Despite the bankruptcy filing, PCH assures that its famous sweepstakes will continue as usual. The “Prize Patrol” team will still be delivering prizes across the U.S. throughout the process. The company has secured debtor-in-possession financing from Prestige Capital to support its operations during the restructuring.
Established in 1953 by the Mertz family in Long Island, New York, PCH initially started as a direct-to-consumer mailings business for magazine subscriptions. Over the years, it expanded its offerings to include sweepstakes, merchandise, and the iconic “Prize Patrol” team. The company has awarded over half a billion dollars in prizes and continues to attract millions of contestants.
However, recent financial challenges have plagued PCH, with losses accumulating since 2022. Factors such as changing consumer behavior, rising costs, supply chain challenges, and competition from major retailers like Walmart and Amazon have contributed to the company’s financial struggles. Additionally, PCH has faced legal scrutiny and costly settlements from regulators over consumer-related issues.
As of March, PCH reported total assets of nearly $11.7 million and total liabilities of about $65.7 million. Despite these challenges, the company remains committed to operating normally during the bankruptcy process and aims to emerge stronger for the future.
The company’s current workforce comprises 105 employees, generating an annual gross revenue of approximately $38 million.
