Merit Street Media, the television venture founded by talk show host Phil McGraw in early 2024, has filed for Chapter 11 bankruptcy. Simultaneously, they've initiated legal action against their distribution partner, Trinity Broadcasting Network (TBN).
The bankruptcy filing, submitted to the U.S. Bankruptcy Court in the Northern District of Texas, attributes the filing to “severely strained liquidity” and the inability to secure additional investment. The filing also cites ongoing legal disputes with TBN and the Professional Bull Riders (PBR) organization as contributing factors.
The lawsuit against TBN alleges a breach of contract, claiming TBN failed to provide the nationally agreed-upon distribution and other crucial support as detailed in their agreement. A Merit Street statement alleges TBN “failed to provide clearly agreed-upon national distribution and other significant foundational commitments.” TBN hasn’t yet responded publicly.
Merit Street estimates its assets and liabilities to be between $100 million and $500 million, with 200 to 999 creditors, including significant players like DirecTV, Nexstar, and Nielsen. The lawsuit details TBN's agreement to provide distribution access and “first-class quality” production services for McGraw's content, including “Dr. Phil Primetime”. In return, McGraw and his production company, Peteski Productions, provided content and funding.
The complaint alleges that shortly after Merit Street’s formation, TBN “began to abuse its power as a controlling shareholder,” engaging in practices that allegedly benefitted TBN and its CEO, Matthew Crouch, at Merit Street’s expense. This included forcing expensive third-party distribution deals, high-rate studio space leases, and failure to transfer “must-carry” rights for national distribution. The suit claims TBN’s actions left Merit Street without a platform to air its programming. “Merit Street has nowhere to send its broadcast signal and nowhere to air its programming no matter how great it may be,” the complaint states.
Launched in early 2024, Merit Street is jointly owned by McGraw and TBN. Peteski Productions made several capital infusions into Merit Street. However, the company couldn’t complete an equity financing round, leading to the bankruptcy declaration. The network featured interview and commentary programs, including a high-profile interview with Donald Trump following his New York state conviction, and coverage of immigration enforcement.
In November 2024, the PBR withdrew its content due to nonpayment for broadcast rights; this is currently in arbitration. The company also underwent internal restructuring, including layoffs of approximately one-third of its workforce in August 2024, primarily impacting news operations. At the time, the company stated the layoffs aimed to improve efficiency and collaboration.
Merit Street content was available through major distributors like DirecTV, Dish, AT&T U-verse, and Comcast Xfinity, but lacked presence on most vMVPDs or major streaming platforms. It also operates the free streaming channel Merit+. The company plans to continue airing library programming during its restructuring.