The sweepstakes company Publishers Clearing House (PCH) has filed for bankruptcy protection in New York this week (April 9).
The company filed in Manhattan and entered the process with $490,000 in cash and around $40 million in debts to employees, vendors, service providers and landlords.
Founded in 1953, it was originally created to offer an alternative to door-to-door magazine subscription sales by instead focusing on bulk mail direct marketing. It was in 1967 when it introduced sweepstakes and prize-based games.
It has become commonly known for its ‘Prize Patrol’ sweepstakes where the winners are adorned with oversized checks when surprised with the win.
In a press release, issued on Wednesday, it states the company “will utilize the financial restructuring process to finalize the shift away from its legacy direct mail and retail merchandise and magazine subscription businesses and focus on its transformation to a pure digital advertising business that offers free-to-play entertainment experiences through a variety of web and app experiences, powered by a chance to win.”
Publishers Clearing House will continue awarding prizes
Throughout the process, PCH is committing to operating in a business-as-usual manner and its Prize Patrol team will continue awarding prizes to sweepstakes winners across the country.
To be able to fund operations without disruption, a debtor-in-possession financing from Prestige Capital has been lined up.
“Today marks a crucial development in our transition to a digital advertising-supported entertainment company,” said Andy Goldberg, Chief Executive Officer, in the news release.
“By taking this step, we are breaking free from the past financial constraints of our legacy direct mail and online retail merchandise and magazine subscription operating model, and taking action to establish a strong foundation for our future – enabling PCH to unlock the full potential of our digital advertising and consumer insights business.
“Importantly, our world-renowned sweepstakes will continue to be a cornerstone of our experiences, and we intend to continue offering free-to-play entertainment and awarding prizes in the ordinary course of business during and after this process to uphold the historic legacy of Publishers Clearing House.”
Featured Image: Credit to ‘frankieleon’ on Flickr
