Publishers Clearing House bankruptcy leaves some “forever” prize winners without payments
Buyer of PCH assets says it will not honor prizes issued before July 15 as company shifts to a digital model amid bankruptcy
NEW YORK — Some winners of Publishers Clearing House sweepstakes who had been receiving so-called “forever” payments are being told those streams may stop after the company’s Chapter 11 bankruptcy and sale of assets.
Publishers Clearing House filed for Chapter 11 in April, citing rising operating costs, changes in consumer behavior and the financial strain of its legacy direct-mail business. In July, gaming platform ARB Interactive bought certain PCH assets for $7.1 million and launched a new platform called "PCH Digital" that will host future sweepstakes. Under the terms of that sale, ARB told consumers it will not be responsible for paying prizes issued by PCH before July 15, with an exception for two unawarded "SuperPrizes" that remain promoted.
In a statement to The Associated Press, ARB acknowledged the disappointment some past winners will feel as a result of the bankruptcy and said it was "committed to restoring and preserving the trust" of the PCH brand going forward. The company added it was "taking decisive steps to ensure that every future prize winner can participate with absolute confidence," and pointed to plans for a paying structure "that stands separate from ARB to ensure that all future PCH prizes are honored, regardless of ARB’s financial status." PCH did not immediately respond to requests for comment.
It was not immediately clear how many past winners will be affected by ARB’s stance. When PCH filed for Chapter 11 in April, it listed 10 unidentified prize winners among its creditors with the largest unsecured claims, court filings show, citing millions of dollars of claims.
Some winners said they experienced disruptions even before the Chapter 11 filing. A man who won a $5,000-a-week "forever" award in 2012 told The New York Times and local station KGW that he did not receive his annual check from PCH in January, forcing him to scramble to cover bills after losing an expected source of income.
Publishers Clearing House traces its roots to 1953, when Harold and LuEsther Mertz and their daughter Joyce Mertz-Gilmore began selling magazine subscriptions by direct mail from their Long Island home. The company introduced a direct-mail sweepstakes in 1967 and became widely known for its in-person "Prize Patrol," formed in 1989, and for surprising winners with oversized checks that were often featured in television commercials.
Over time the company expanded its product offerings to include merchandise and items marketed in the style of "As Seen on TV" accessories. But PCH also faced regulatory scrutiny and several costly legal settlements over the years after critics and regulators said some consumers mistakenly believed that purchasing products increased their chances of winning sweepstakes.
In its Chapter 11 filing, PCH said it was working to "finalize a shift away" from its legacy direct-mail business toward a pure digital advertising model, citing competition and the high costs of maintaining its prior operations. The sale to ARB and the transition to PCH Digital are part of that restructuring effort.
The sale agreement and ARB’s public statements leave unresolved questions for people who were counting on long-term prize payments. The company said two unawarded SuperPrizes will still be promoted, but otherwise disavowed responsibility for prizes issued before July 15. How courts and bankruptcy proceedings will treat claims from prize winners listed among PCH’s creditors remains to be determined as the Chapter 11 case proceeds.
For some longtime winners, the developments highlight the risks that can accompany long-term payout promises when a company faces financial distress. The number of affected winners and the amounts involved have not been publicly detailed beyond PCH’s disclosure of several large unsecured claims in its April filings.
As PCH moves toward a digital-only business model under new ownership of certain assets, ARB said it intends to establish payment mechanisms to protect future winners. Meanwhile, some past winners are seeking clarity and restitution as the bankruptcy process continues.