With the recent bankruptcy of Publishers Clearing House—the once-beloved “dream maker” of the consumer and media worlds—it’s hard not to feel the sting of finality. An American icon may soon join the ranks of the extinct.
While the sweepstakes giant managed to weather its first two major scandals, the third proved to be its undoing.
Scandal One: Dumped Dreams and a Disbelieving Press
The first brush with controversy came in the early 1990s. New York news correspondent Arnold Diaz reported that thousands of PCH sweepstakes envelopes had been discovered by city sanitation workers, dumped unceremoniously by the roadside. Diaz implied that PCH routinely discarded legitimate entries—an allegation that spread rapidly through the major news outlets.
At the time, I was part of the internal team assigned to investigate. We traced the issue to a disgruntled third-party supplier who had failed to process the entries and instead dumped them. Despite our findings, Diaz remained skeptical.
Surprisingly, the media storm didn’t hurt us. In fact, it had the opposite effect: I reported to senior management that sales had risen by nearly 10% in the wake of the scandal. It appeared the public assumed—incorrectly—that ordering increased their odds of winning. And so, more people bought from us.
Scandal Two: The Eight-Letter Word That Shattered Integrity
The second scandal was more calculated. In 1992, we debated internally whether to start calling recipients “finalists” in our mailings—a misleading term designed to boost response rates.
A fierce debate erupted among executives. Our president strongly opposed it, arguing that we were already experiencing record sales and should not jeopardize consumer trust. And most other executives opposed its use as well. Legal counsel warned that the wording could land us in serious legal trouble.
“It was a bloody fight in that boardroom,” I recall. And then the next day, and behind closed doors, the decision was made: “Finalist” would be used in all promotional materials. This marked a definitive shift in corporate philosophy—from integrity-driven marketing, as championed by our founder Harold Mertz, to profit-at-any-cost. It was our “Greed is good” turning point.
Sales doubled. We broke the $1 billion mark in annual revenue. This success came at only a small price: lawsuits from a dozen state attorneys general, a $490,000 settlement, and a commitment never to use that word again. If the AGs had known how much we had profited, they likely would’ve raised the fine a hundredfold.
Scandal Three: The Addiction That Broke the Business
The third scandal blindsided everyone—and triggered a collapse not just of a company, but of an entire industry.
In 1998, 88-year-old Richard Lusk flew from California to Tampa, Florida, convinced he’d won $10 million from American Family Publishers, a PCH competitor. His belief stemmed from a misleading mail piece.
Lusk’s story sparked national outrage and uncovered a hidden crisis: senior citizens addicted to sweepstakes, compulsively buying magazine subscriptions and merchandise under the false belief it would improve their chances of winning.
The fallout was swift and brutal. PCH’s sales plummeted by 50% overnight. We faced legal action from all 50 state attorneys general, a wave of class action lawsuits, U.S. Senate hearings, relentless public backlash, and an avalanche of negative media coverage. Bomb threats and mass layoffs followed.
PCH fought to survive, but after 25 years of struggles, the company filed for Chapter 11 bankruptcy this past April.
Legacy of a 30-Year Insider
The scandals that rocked Publishers Clearing House weren’t just corporate headlines—they were personal chapters in the life of one longtime employee who lived through every twist and turn. In Downfall of an Icon, the author delivers an unfiltered, insider’s chronicle of PCH’s meteoric rise and dramatic unraveling. This book doesn’t just pull back the curtain on one of America’s most recognizable brands; it captures the eccentric, often outrageous culture that fueled its success—and, arguably, its decline. From landmark victories to jaw-dropping missteps and outrageous comedy (including an executive’s now-infamous companywide speech delivered in his underwear), the story is equal parts business exposé and laugh-out-loud memoir.
Discover your next unforgettable read—Downfall of an Icon is now available on Amazon and Barnes & Noble.
👉 Downfall of an Icon on Amazon
Written in partnership with Tom White
