Merit Street Media, the television production and distribution company formed by former talk show host Dr. Phil McGraw, has filed for Chapter 11 bankruptcy protection.
The filing comes less than two years after Merit Street Media brought its first TV channel, Merit TV, to broadcast and cable TV platforms. Separate from the bankruptcy filing, Merit Street Media is suing its distribution partner, Trinity Broadcasting, on allegations of breach of contract.
Both legal cases come about two weeks after Merit Street Media laid off nearly four dozen employees amid a restructuring of its internal operations.
Two months ago, McGraw and Merit Street Media CEO Ken Solomon attempted to woo advertisers to the network by pitching itself as a rapidly-growing media operation with a television network that reached millions of viewers on broadcast, cable and streaming TV.
But the reach often didn’t translate into viewers, with some of Merit TV’s core programming, including its Professional Bull Riders (PBR) events and TCL Boxing matches, attracting an audience of just a few thousand viewers across platforms.
Merit Street Media has not paid PBR for its programming, according to the company’s bankruptcy affidavit filed in federal court on Wednesday. The company has more than 200 other creditors, including pay TV provider DirecTV, broadcaster Nexstar Media Group and measurement firm Nielsen Media Research.
The lawsuit against Trinity Broadcasting accuses the religious programming distributor of failing to adhere to certain contractual agreements related to its airing and production support of Merit TV shows.
Trinity Broadcasting is a major shareholder in Merit Street Media, and the complaint filed against it accused the broadcaster of abusing its position in a way that unjustly enriched itself by “forcing costly third-party distribution deals, leasing studio space at high rates, and failing to transfer must-carry rights for national distribution.”
Merit Street accused TBN of depriving it of a platform to “send its broadcast signal” and leaving it with “nowhere to air its programming, no matter how great it may be.” The Desk observed Merit TV’s streaming feed as still available on Samsung TV Plus, and its broadcast signal in San Francisco was still available as of Wednesday afternoon. (Merit TV’s affiliate in San Francisco, KOFY-TV, is not affiliated with Trinity Broadcasting.)
Trinity Broadcasting has not responded to the lawsuit.
Merit Street Media sought to make inroads with Americans who felt disheartened by the programming available on mainstream cable news outlets. McGraw and other executives pitched the network as a way for advertisers to reach American consumers in the heartland of the country, a demographic typically overlooked by other broadcasters.
“The heartland of America — not LA and New York, but everything in-between — they spend more money than those two coasts combined,” McGraw said during a presentation earlier this year. “They have awakened, and they’re tuning in and seeking us out on an accelerated rate…and I strongly believe that the key to success — and I know there are a lot — but, to me, the key to success is solving a problem that no one else is even addressing.”
In addition to its flagship television network, Merit Street Media also produces and distributes a number of topical podcasts featuring McGraw and others opining on the headlines of the day and topics that are often political in nature.
