2025-04-10T19:45:44.000Z

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NEW YORK (AP) Publishers Clearing House (PCH), a marketing and sweepstakes titan that has become synonymous with large, celebratory checks delivered by its iconic "Prize Patrol," has officially filed for Chapter 11 bankruptcy protection. This significant announcement was made earlier this week, marking a pivotal moment for a company that has been a fixture in American homes for decades.

In their statement regarding the bankruptcy proceedings, PCH indicated that the move is not merely a retreat but a strategic maneuver to finalize a transition away from its traditional business model, which included direct mail, retail merchandise, and magazine subscriptions. Instead, the company is setting its sights on a "pure digital advertising" model. This shift aims to allow PCH to continue offering engaging, free-to-play entertainment and an array of prizes while keeping pace with the rapidly evolving digital landscape.

The Chapter 11 filing, which took place in New York on Wednesday, comes as PCH grapples with mounting financial pressures. These pressures have arisen from rising operational costs and shifting consumer habits that have posed challenges for the company in recent years. CEO Andy Goldberg emphasized the need for a fresh start, stating that pivoting from traditional methods will help the company break free from past constraints and create a robust foundation for future growth.

Despite the bankruptcy proceedings, PCH reassured its followers that the beloved sweepstakes will not be disappearing. The company intends to operate as usual throughout the restructuring process. The renowned Prize Patrol team will continue to surprise and deliver awards to winners across the United States. To support day-to-day operations during this transitional phase, PCH has secured debtor-in-possession financing from Prestige Capital.

PCH has a rich history that can be traced back to 1953 when Harold and LuEsther Mertz, along with their daughter Joyce Mertz-Gilmore, started the company out of their Long Island home. They initially focused on sending direct-to-consumer mailings to solicit magazine subscriptions through a single offering. Over the years, PCH gradually evolved, incorporating cash prize opportunities for consumers starting with their first direct mail sweepstakes in 1967. The company expanded its portfolio to include a diverse range of merchandise, from collectible figurines to household items and popular As Seen on TV products. The famous Prize Patrol team, which burst onto the scene in 1989, became an integral part of the PCH experience.

Known for their dramatic prize deliveries and oversized checks, PCH has awarded over half a billion dollars in prizes, continuing to attract millions of contestants eager to participate in their sweepstakes. However, it hasn't been smooth sailing in recent years as financial difficulties began to mount.

William H. Henrich, co-chief restructuring officer for PCH, elaborated on the financial challenges the company has faced in a court declaration submitted on Wednesday. He noted that while PCH's direct mail and e-commerce initiatives were profitable for many years, shifting consumer behavior patterns, along with increased costs and competition, have led to a decline in performance, resulting in financial losses that began in 2022.

Several cost pressures have been identified as significant contributors to PCH's current situation. These include rising shipping and postal rates, disruptions in supply chains and inventory management that have persisted since the onset of the COVID-19 pandemic, as well as fierce competition from major retailers like Walmart and Amazon who have increasingly dominated the e-commerce landscape.

Additionally, PCH has had to navigate scrutiny from regulators over consumer misunderstandings regarding the implications of making purchases in relation to winning sweepstakes. As a result, the company has incurred substantial legal costs, including a recent $18.5 million settlement with the Federal Trade Commission in 2018.

As per the latest court documents, by the end of March, PCH reported total assets of approximately $11.7 million against total liabilities of about $65.7 million. Currently, the company employs 105 people and boasts an annual gross revenue of around $38 million.