Publishers Clearing House Sold to Modo Casino Operator in $7.1M Deal

The offer from ARB Interactive includes $7.1 million in cash and will assume prizewinner liabilities and other expenses totaling approximately $378,000.

Additionally, ARB Interactive will consider offering jobs to existing employees. When Publishers Clearing House filed for bankruptcy in April, there were about 105 employees.

Following the bankruptcy, Publishers Clearing House mentioned the possibility of selling assets, but also expressed interest in potentially finding a business partner to fund a long-term business plan.

ARB Interactive Acquires a Legacy Brand

ARB Interactive's chief executive, Patrick Fechtmeyer, has committed to “digitally transforming the business through mobile-first, interactive, and free-to-play games enhanced by the power of sweepstakes and prizes.”

Fechtmeyer also added that Publishers Clearing House has begun adding apps and mobile games to its portfolio to continue its digital transformation.

“Pending court approval, we’re excited to begin this next chapter and deliver an experience that honors the legacy of the brand while earning the trust of a new generation of players,” Fechtmeyer said.

The sale will be reviewed on Wednesday by Judge Martin Glenn of the U.S. Bankruptcy Court in Manhattan.

The second-highest bid was submitted by PCH Interactive. It had $7 million in cash, assuming the $378,000 in expenses.

It's unclear if PCH Interactive is connected to the company that went bankrupt.

From Direct Mail Giant to Bankruptcy

Publishers Clearing House was founded in the 1950s on Long Island, New York. It was a direct mailing firm that would solicit subscribers for various magazines.

The business then expanded into direct mail for selling things like books, collectibles, and more.

Then it began offering sweepstakes prizes, which initially started as direct mail, and the promotion grew in popularity with the in-person Prize Patrol, which was also featured in TV commercials.

However, the business did get scrutinized by the government. The Federal Trade Commission had concerns that people were making purchases with the hopes of improving their chances of winning.

In 2023, Publishers Clearing House denied wrongdoing, but did settle with the commission for $18.5 million.

With that settlement and the closure of its e-commerce business, it was forced to file for bankruptcy.

When Publishers Clearing House filed, it had $490,000 in cash and $40 million in debt to employees, vendors, service providers, and landlords.

In 2018, the company had about $879 million in revenue, but as customers turned to online shopping and the pandemic hit, it proved to be too much for the company.

When the bankruptcy was announced, Publishers Clearing House remained committed to crowning a $10,000 winner that week.

“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," CEO Andy Goldberg said in a Wednesday statement.

Publishers Clearing House paid about $30,000 to prize winners weekly, but owed about $1.8 million to recent winners.

According to court documents, it owed about $26 million over the next 60 years to lifetime prize winners.