Publishers Clearing House exits bankruptcy, focused on modernizing sweepstakes

Publishers Clearing House LLC has emerged from bankruptcy with a new owner focused on modernizing its famous sweepstakes competition.

The Jericho-based company was purchased by ARB Interactive for more than $7 million in a bankruptcy court action. Miami-based ARB specializes in mobile gaming and was one of three bidders in the auction, which was held last summer, according to court filings.

PCH's new chief executive, Owen O’Donoghue, has announced a plan for Prize Protection Program guarantees going forward after the bankruptcy filing stopped payments to some sweepstakes winners.

O'Donoghue said prize money would now be held in escrow accounts backed by the Federal Deposit Insurance Corporation, or FDIC, and managed through “a bank-run investment vehicle.”

He said upon joining PCH in October, “With the Prize Protection Program, we are combining PCH’s iconic sweepstakes heritage with modern, secure digital experiences, ensuring every winner is protected while introducing mobile-first gaming that excites and engages users nationwide.”

Spokespeople for PCH and ARB didn’t respond to requests for comment on Monday and Tuesday.

PCH, which was founded 73 years ago in Port Washington, filed for Chapter 11 bankruptcy protection from its creditors in April. The company listed assets of between $1 million and $10 million against liabilities of between $50 million and $100 million, court documents show.

Company executives told a bankruptcy judge in Manhattan that they were working to “finalize a shift away” from the direct-mail business to a “pure digital advertising” model because of rising competition, expensive operating costs and changes in consumer behavior.

Days before declaring bankruptcy, PCH laid off 50 of the 112 workers at its office on West 22nd St. in Manhattan, according to a notification made to the state Department of Labor in January 2025. 

The job cuts in the city followed layoffs at the PCH headquarters in Jericho, where 156 employees out of 393 were laid off between July 2024 and February 2025, according to a separate notification in April 2024.

The company's combined workforce in Jericho and Manhattan now totals about 300 employees, down from about 500, or a 41% reduction, based on the notifications.

PCH is best known for its “prize patrol,” which shows up on people’s doorsteps with oversized sweepstakes checks. The sweepstakes contest was started in 1967 to get people to review the magazine subscriptions that the company was offering.

Last year’s bankruptcy interrupted the lifetime payouts of at least 10 sweepstakes winners, according to court filings. ARB has said it isn’t responsible for paying prize money awarded before mid-July 2025.

PCH was started in 1953 by Harold and LuEsther Mertz and their daughter, Joyce Mertz-Gilmore, to send direct-to-consumer mailings soliciting subscribers for a number of magazines through one single offering.

PCH flourished for decades until consumers switched from print to digital copies of magazines and government regulators questioned the company’s practices.

Three years ago, PCH agreed to pay $18.5 million to customers who the Federal Trade Commission alleged were charged surprise fees, sent misleading emails or thought they increased their chances of winning the sweepstakes by purchasing products. In 2000-2001, the company reached a $52 million settlement of deception charges involving all 50 states.

By James T. Madore

james.madore@newsday.comJamesTMadore

James T. Madore writes about Long Island business news including the economy, development, and the relationship between government and business. He previously served as Albany bureau chief.