(Bloomberg) — Publishers Clearing House LLC, famous for handing out over-sized checks on the doorsteps of its surprised contestants, has filed bankruptcy.
The 72-year-old company owes as much as $100 million to more than 100,000 creditors, it said in a Chapter 11 filing in Manhattan. PCH listed between $1 million and $10 million in assets on its bankruptcy petition.
PCH rose to prominence through ads promoting its sweepstakes which flooded daytime televisions in the late 1980s and 1990s. The company said that it had awarded more than $500 million in prizes over the decades and continued to offer sweepstakes through social media and mobile apps, according to court papers.
Company revenue shrank as online consumers demanded faster deliveries and free shipping, which PCH could not meet, according to court documents. Revenue fell from nearly $879 million in 2018 to $181 million last year, court documents show.
The company plans to revive its fortunes, in part, by delivering advertising to customers who visit its website, which last year attracted 36 million visitors, the company said in a court filing.
While in bankruptcy, the company will leave behind its magazine subscription and direct-mail sales operations that the founders began in 1953 and focus on becoming “pure digital advertising,” Chief Executive Officer Andy Goldberg said in a statement.
“Importantly, our world-renowned sweepstakes will continue to be a cornerstone of our experiences,” Goldberg said.
The company said in court papers that it will use its time in Chapter 11 to restructure its operations and increasing PCH’s online presence. It said it will also consider opportunities to sell its assets.
PCH expanded to the web in the late 1990s through the acquisition of several digital firms while maintaining its mail-order marketing business. The company’s e-commerce marketing programs became a major source of revenue along with advertising, PCH co-Chief Restructuring Officer William Henrich said in a court filing.
As PCH’s revenue declined, the company incurred losses beginning in 2022, Henrich said. Meanwhile, television advertising became more expensive and less effective amid the rise of streaming, “making it harder to reach the mass audiences of earlier decades,” Henrich said.
The company’s owners include various trusts associated with founders, Harold and LuEsther Mertz and their daughter, Joyce Mertz-Gilmore, according to court records.
The case is Publishers Clearing House LLC, number 25-10694, in the US Bankruptcy Court for the Southern District of New York.
(Updates with company statement in fourth paragraph.)
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