By Andrea Mastrocinque-Martone
Port Washington’s Publishers Clearing House, once a household name synonymous with sweepstakes and magazine subscriptions, experienced a significant downfall in recent years.
This decline was attributed to a combination of legal troubles, deceptive marketing practices and changing consumer behavior. Once one of America’s most beloved and wealthiest companies was left in disgrace and near bankruptcy.
Darrell Lester, who grew up in Port Washington and went on to be a 30-year veteran of PCH and a senior vice president, is the only person alive who witnessed it all.
In his new compelling book, “Downfall of an Icon, The Inside Story of Publishers Clearing House,” he chronicles the company’s epic rise and shocking collapse. Lester will be visiting the Port Washington Public Library on Saturday, Oct. 26 at 2 p.m.
Founded in 1953 by Harold Mertz as a mom-and-pop shop, PCH began as an alternative to door-to-door magazine subscription sales. The company introduced its famous sweepstakes in 1967, which quickly became its hallmark.
By the 1980s, PCH had grown into a powerhouse, with sales soaring from $30 million to $200 million and a workforce of about 500 employees.
Who in America didn’t recognize the iconic “Prize Patrol,” which surprised winners with oversized checks at their homes in all 50 states? Over the course of its history, PCH awarded over $614 million in prizes.
PCH’s troubles began in 1992 when the company faced a handful of lawsuits and investigations regarding its marketing practices due to a news report by Arnold Diaz after thousands of discarded sweepstakes entries were found on a Long Island roadside. A class action lawsuit was filed after thousands of discarded sweepstakes entries from non-purchasing contestants were found in the company’s trash.
This incident reinforced suspicions that PCH favored those who made purchases when selecting winners. This legal trouble was quickly and easily settled.
The company’s success accelerated to over $1 billion in annual sales by the late 1990s. And then the real trouble began. According to Lester, “It almost happened overnight.”
The negative publicity from lawsuits by every state Attorney General and multiple class action lawsuits, along with Senate Hearings on sweepstakes, significantly impacted PCH’s business. Industry sources estimated that the company’s response rates decreased by 7% to 12%, and its sales volume dropped by 22% to 30%.
According to Mr. Lester, it was much worse as “sales dropped by 50%.” In 2000, PCH was forced to lay off a quarter of its 1,000-person workforce. Keep in mind that at one point, nearly 100% of PCH’s workforce were Port Washington residents.
PCH’s struggles have continued in recent years. In April 2024, the company announced it would lay off nearly half of its 393 workers at its Jericho Headquarters (moved from Channel Drive in Port Washington).
Today, PCH is a shadow of its former self. While the company continues to run sweepstakes and has expanded into digital games and online contests, its future remains uncertain. The company has given out over $600 million in prizes over the years. Still, its reputation has been severely damaged by the numerous legal issues and allegations of deceptive practices as outlined in Lester’s page-turner book.
To learn more about Lester’s new book detailing the PCH’s history, visit pwpl.org for information about the author talk on Saturday, Oct. 26.
