Publishers Clearing House Takes Strategic Action to Complete Transformation to a Digital Advertising-Supported Entertainment Company
Publishers Clearing House today announced that it has filed a voluntary petition for chapter 11 relief in the United States Bankruptcy Court for the Southern District of New York to reorganize the Company’s capital structure and improve its long-term growth trajectory. Specifically, 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.
“Today marks a crucial development in our transition to a digital advertising-supported entertainment company,” said Andy Goldberg, Chief Executive Officer. “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.”
Throughout the process, PCH is committed to operating in a business-as-usual manner in order to continue delivering for its valued customers, partners, clients, and employees with excellence. Importantly, PCH’s renowned Prize Patrol team expects to continue awarding prizes to sweepstakes winners across the country with the famous big check, champagne and flowers that have endeared the brand to consumers for over 50 years. In fact just this week, the Company surprised a lucky winner with a $50,000 award and the Prize Patrol will be on the road later this week to find their latest weekly $10,000 winner.
To fund operations without disruption, the Company has lined up debtor-in-possession (“DIP”) financing from Prestige Capital. Upon court approval, PCH anticipates the DIP financing will provide liquidity to support operations during the reorganization process.
As part of this process, PCH has engaged SSG Advisors to explore a variety of strategic options moving forward, including the potential sale of its digital assets or a capital infusion from a financial partner that will help fund the Company’s longer-term business plan going forward.
