Publishers Clearing House Bankruptcy Means Winners Will Stop Getting Lifetime Payments And Prize Money From The Company
For nearly 60 years, Publishers Clearing House had been changing individuals’ lives. The company fulfilled their dreams with prize money it promised would keep coming for as long as they lived. Now, it’s coming to end.
But now the company is in bankruptcy and winners’ dreams have turned into nightmares. ARB Interactive, a mobile gaming company bought PCH’s remaining assets. ARB Interactive says it would not honor payouts for those who won their life-changing prizes before July 15th. The company says they have no obligation to under the terms of the sales agreement.
Some winners thought they’d never have to work again. Now, they are uncertain of how they’ll pay their bills.
John Wyllie told TV station KGW:
“This feels like a nightmare. I thought this was going to go on for the rest of my life, so I didn’t really have to worry about money.”
Publishers Clearing House had promised the 61 year-old $5,000 a week for life. Now he’s looking for a job. However, he’s not hopeful. He hasn’t worked for more than 10 years. Now, he is living on the proceeds of sales of his a jet ski and a trailer.
Wyllie said he had no idea the company was even in trouble. Well, that was until his annual check for $260,000 didn’t show up in January.
Wyllie also told KGW:
The company’s bankruptcy is doing more than upending the finances of people. It is eroding a part of America’s popular culture. Why? The Publishers Clearing House Prize Patrol is no more.
The Prize Patrol with their balloons and oversized checks became almost universally recognized since the 1970s. Publishers Clearing House became attractive because it allowed people to win without buying tickets or even the magazine subscription.
How Publishers Clearing House Became An American Institution
Harold and LuEsther Mertz started Publishers Clearing House in the basement of their Long Island home in 1953. The three began selling magazine subscriptions for multiple publications at the same time through direct mailings. Publishers would pay PCH a commission on any subscriptions it sold.
In 1967, the company started offering its first direct mail sweepstakes to attract attention for it’s mailings. Customers could enter for a chance to win prizes regardless of whether or not they purchased a magazine subscription.
That part of the business expanded into its famous “Prize Patrol” in 1989. The Prize Patrol were PCH employees would show up at winners’ homes with a camera crew and oversized novelty checks. The video of Wyllie’s prize patrol appearance in 2012 shows him shaking as he received his check.
That led to references on Saturday Night Live, classic 90s sitcoms like Seinfeld and Cheers.
Publishers Clearing House Revenues Plummet And Company Declares Bankruptcy
However, Publishers Clearing House’s annual revenue has dropped dramatically in recent decades. The company’s revenue fell from $854 million in 2017 to $182 million in 2023.
At the time of its bankruptcy filing in April, the company reported liabilities of between $50 million and $100 million. This also included unpaid prize money. Assets totaled only between $1 million and $10 million, leaving the company with little chance of paying its past winners.
In fact, its filing lists 10 prize winners among the 20 largest unsecured creditors. It estimated the total current value of its promised prizes at $26 million. However, this amount adjusted lower due to the need to pay them over an extended period of time.
Miami-based ARB Interactive defended not paying out prizes since that was never part of its purchase agreement:
“At ARB Interactive, we are committed to restoring and preserving the trust that has defined the Publishers Clearing House brand for decades. We understand the concerns surrounding unpaid prizes owed to past winners and are taking decisive steps to ensure that every future prize winner can participate with absolute confidence.”
However, that’s little comfort to the past winners.
Publishers Clearing House executives made a corporate decision in early 2000s that is now costing prize winners big bucks.
The company used to protect prize winners who chose installments. It would buy a prepaid annuity from a bank or insurance company under the winners’ names. As a result, this would guarantee the payments even if the company later went bankrupt.
Publishers Clearing House stopped using these prepaid annuities. Instead paid winners out of its own revenues, leaving winners at risk now that it went bankrupt.
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