Publishers Clearing House’s bankruptcy means ‘forever’ winners will no longer get paid

Jo-Ann Snyder and her husband Michael open the door for Publishers Clearing House at her home in Wilkes-Barre Township in 2018. Winners who had been promised lifetime prizes are losing those payments due to Publishers Clearing House's bankruptcy. (Aimee Dilger/The Times Leader/AP via CNN Newsource)

For nearly 60 years, Publishers Clearing House had been known for changing individuals’ lives, fulfilling their dreams with prize money it promised would keep coming for as long as they lived.

But now the company is in bankruptcy, and winners’ dreams have turned into nightmares. ARB Interactive, a mobile gaming company that bought PCH’s remaining assets, said that under the terms of the sales agreement it would not honour payouts for those who won their life-changing prizes before July 15th of this year.

Some winners, who thought they’d never have to work again, are now finding themselves uncertain of how they’ll pay their bills.

“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,” John Wyllie told CNN affiliate KGW.

Wyllie, 61, of Bellingham, Washington, had been promised US$5,000 a week for life. Now he’s looking for a new job, but he’s not hopeful, since he hasn’t worked for more than 10 years. He is currently living on the proceeds of sales of some of his prized possessions, like a jet ski and a trailer.

But Wylie said he had no idea the company was even in trouble until his annual check for $260,000 didn’t show up, as expected, in January.

“Why didn’t somebody give me a heads up? ‘Hey, we’re going out of business.’ It’s not a good way to treat anyone,” he said. “Pretty sure I’m going to lose my home.”

The bankruptcy is not just upending the finances of people who had been promised continued riches; it’s eroding a part of America’s popular culture.

Today, Publishers Clearing House and its prize money seem quaint in comparison to jackpots of more than $1 billion from Powerball and Mega Millions. But the PCH Prize Patrol with their balloons and oversized checks became almost universally known across the county from the 1970s through early 2000s, long before national lotteries and billion-dollar jackpots started grabbing headlines, feeding fantasies of riches. And unlike state lotteries, Publishers Clearing House allowed people to win without buying tickets or even the magazine subscriptions it was hawking.

Publishers Clearing House was started by Harold and LuEsther Mertz and their daughter Joyce in the basement of their Long Island home in 1953, selling magazine subscriptions for multiple publications at the same time through direct mailings, according to its bankruptcy filing. PCH would be paid a commission on any subscriptions it sold.

In 1967, to attract attention for its mailings, the company started offering its first direct mail sweepstakes. 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, in which PCH employees would show up at winners’ home with a camera crew and oversized 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, as well as the centrepiece of a joke by U.S. President George W. Bush in 2007 as the only prize he had hopes of winning once he left office.

But Publishers Clearing House’s annual revenue has dropped dramatically in recent decades, falling 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, including the promised prizes. Assets totalled only between $1 million and $10 million, leaving it with little chance of paying its past winners.

In fact, its filing lists 10 prize winners among the 20 largest unsecured creditors, although the names and addresses of those winners are redacted. It estimated the total current value of its promised prizes at $26 million, an amount adjusted lower due to the need to pay them over an extended period of time. It had payments of $1.9 million due just this year.

ARB Interactive, headquartered in Miami, 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,” the company said in a statement. “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.”

It said it is planning to implement a pay structure separate from that company so that “all future PCH prizes are honored, regardless of ARB’s financial status.”

But that’s little comfort to the past winners.

Matthew and Tamar Veatch, disabled veterans who won the same $5,000 a week prize as Wyllie in 2001, told CNN affiliate KGW that while they have their military pensions to pay their bills going forward, it will suddenly be a very tight budget.

“You change people’s lives, and now, you messed it up,” said Tamar Veatch.

“The big letdown for me is that we trusted them,” said Matthew Veatch.

By Chris Isidore, CNN