Dr. Phil McGraw's television career. Phil McGraw's path to cable network ownership began with a daytime talk show. Dr. Phil debuted September 16, 2002 with Oprah Winfrey's Harpo Studios as producer. The show was second in ratings only to Oprah at launch and became the most-watched daytime syndicated talk show after Oprah's departure in 2011. McGraw's Peteski Productions, formed in September 2002, produced the show distributed by CBS Media Ventures (formerly King World Productions, acquired by CBS in 1999).
The Dr. Phil show ran for 21 seasons, ending May 25, 2023 as the syndicated daytime talk show market changed. The program led to The Doctors spinoff (2008-2022) produced by son Jay McGraw. The conclusion of the CBS show preceded the formation of Merit Street Media.
Trinity Broadcasting partnership. Merit Street Media was formed as a joint venture between Trinity Broadcasting Network and McGraw's Peteski Productions. Under a binding letter of intent finalized in late 2023, TBN held a 70% controlling stake with Peteski owning 30%. Trinity Broadcasting Network is one of the world's largest religious broadcasters, and the partnership gave Merit Street access to TBN's distribution infrastructure and cable carriage relationships.
The arrangement contemplated significant commitments from both parties. Trinity later alleged the deal involved a $500 million, ten-year agreement, which TBN claimed McGraw failed to honor. The partnership structure became central to the fraud allegations in the bankruptcy proceedings.
Steve Harvey investment. In March 2024, Steve Harvey acquired an equity stake in Merit Street through Steve Harvey Global (SHG). The deal encompassed production, talent development, and on-air services. Merit Street acquired over 300 episodes of Harvey's NBC-produced daytime talker Steve (2017-19). Harvey's first project with Merit Street was announced as a documentary about the Steve Harvey Mentoring Program featuring both Harvey and McGraw.
Network launch. Merit Street Media launched April 2, 2024 to over 80 million homes—described as the largest network TV launch in decades with distribution comparable to CNN. The network provided 24/7 programming branded as Merit TV, featuring Dr. Phil content, Steve Harvey programming, and licensed sports content including Professional Bull Riders events.
According to Wikipedia, PBR content accounted for 2.4 million unique viewers and 31% of Merit Street's total viewer base. PBR entered an agreement with Merit in mid-2024 to license bull-riding programming to the network. The network later claimed distribution had grown to over 90 million homes, while viewership levels remained far lower.
Viewership decline. Despite launching to 80+ million homes with major cable carriage, Merit TV averaged 27,000 primetime viewers in 2024—ranking 130th among broadcast and cable outlets. The network did not convert distribution into higher viewership.
The decline continued through 2025. By Q2 2025, primetime viewership had dropped to 17,000 viewers. Full-year 2025 data showed Merit Street dropped 41%—the largest decline of any network. Average primetime viewership fell to 16,000 viewers. The timeline was fifteen months from debut to bankruptcy filing and nineteen months from launch to Chapter 7 conversion.
Cable industry headwinds. Merit Street launched into a structurally declining cable environment. Cable TV networks commanded just 22.5% of all television viewing by August 2025—down from highs above 50% a decade earlier. Pay TV households dropped from a peak of 105 million in 2010 to around 70 million projected for 2024.
The demographic challenge was pronounced: only 16% of adults under 30 subscribe to cable compared to 64% of those 65 and older. U.S. cable subscriptions fell 3.7% year-over-year to 66.1 million in 2024, continuing a multi-year decline trend. For a new network attempting to build audience with existing cable subscribers, these conditions constrained growth.
TBN partnership breakdown. The joint venture partners began trading allegations well before the bankruptcy filing. In court documents, Merit Street alleged Trinity "sabotaged" the network through a "conscious and knowing choice to cause Merit Street to lose its national distribution by withholding payments." Merit Street claimed TBN forced it to take on more than $100 million in payments or obligations due to the partnership structure.
Merit Street characterized TBN's production services as "comically dysfunctional," citing teleprompter blackouts, malfunctioning monitors, and faulty touch screens. The allegations framed these issues as evidence that TBN failed to provide the required production infrastructure.
Trinity countersued on August 19, 2025, alleging McGraw engaged in a scheme to "fleece" the Christian broadcaster. TBN accused McGraw of fraudulent inducement and breach of contract. The counterclaim detailed specific allegations:
| TBN Allegation | Details |
|---|
| Programming failure | McGraw failed to deliver promised reboot of daytime talk show with hundreds of new episodes yearly |
| Cash depletion | TBN listed company airplane for sale ($17 million) in November 2024 after cash reserves "depleted" by Merit Street funding |
| Airplane incident | McGraw allegedly claimed he could sell the plane to provide funds but instead filed a flight plan to New Orleans for the Super Bowl |
| Ownership dilution | TBN's stake allegedly diluted from 70% to 30% while Peteski's increased |
| Labor costs | McGraw rehired dozens of staffers from Dr. Phil after pledging to cut labor costs |
| Equity payment | McGraw allegedly declined to make $9 million payment tied to Peteski's 30% equity stake |
PBR contract termination. The relationship with Professional Bull Riders deteriorated rapidly after launch. PBR entered an agreement with Merit in mid-2024 to license bull-riding programming, with PBR content accounting for nearly a third of the network's viewership. On November 14, 2024, PBR announced termination of the contract after not being paid.
PBR subsequently filed a $181 million debt claim against Merit Street Media—the largest claim in the bankruptcy case. PBR is owned by TKO Group, the parent company of WWE and UFC.
PBR went further than filing a claim. The organization alleged Dr. Phil "orchestrated this Chapter 11 Case to avoid menacing litigation against PBR and jumpstart Envoy Media Co." PBR filed a motion questioning whether the bankruptcy was filed in "bad faith."
Petition and simultaneous lawsuit. On July 2, 2025, Merit Street Media filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Northern District of Texas. The company listed assets and liabilities each between $100 million and $500 million.
The same day, Merit Street sued former partner Trinity Broadcasting Network for breach of contract and breach of fiduciary duty, alleging TBN "abused its position as the controlling shareholder." The simultaneous filing and litigation signaled a contentious restructuring ahead.
The company cited "severely strained liquidity" and inability to secure outside investment as primary causes for the filing. Ongoing legal conflicts with Trinity Broadcasting and Professional Bull Riders were identified as contributing factors to the liquidity crisis.
Envoy Media formation. The timing of McGraw's next venture became central to bad faith allegations. McGraw founded Envoy Media Co. on July 1, 2025—the day before Merit Street filed for bankruptcy. Creditors cited the timing as part of their bad faith arguments.
Two weeks after Merit Street's bankruptcy filing, Envoy TV announced a carriage deal with Charter Communications, the No. 1 cable operator with 12.6 million subscribers in 41 states. The long-term distribution agreement ensured carriage through Spectrum TV Select video packages across Charter's 41-state footprint including New York, Los Angeles, and Dallas-Fort Worth.
Separately, Peteski Productions paid $925,000 to over 150 former Merit Street Media employees following the chapter 11 filing. The payments raised questions about estate versus affiliate liability and whether obligations properly belonged to the bankruptcy estate.
PBR characterized Envoy's formation and the Charter deal as evidence supporting its bad faith allegations.
DIP financing and first-day relief. Sidley Austin LLP represented Merit Street in the chapter 11 filing and negotiated $21.4 million in DIP financing through a DIP Motion filed the day of the petition. At the first day hearing on July 3, 2025, the court entered an Interim DIP Order and granted all requested relief including an expedited adversary proceeding schedule.
First-day orders included standard relief: cash management, employee compensation continuation, insurance, utilities, and taxes. Gary Broadbent was appointed as Chief Restructuring Officer, as described in his CRO Declaration. The court designated the case for complex chapter 11 treatment.
On September 3, 2025, the debtor filed a Second DIP Motion seeking an additional $10 million unsecured facility on administrative priority basis to continue operations pending sale.
First-day motions and orders.
| Motion | Description | Order Date |
|---|
| DIP Financing | $21.4 million postpetition facility | July 3, 2025 (interim) |
| Cash Management | Continued bank accounts and treasury operations | July 3, 2025 (interim); July 28, 2025 (final) |
| Employee Compensation | Wages, benefits, and related obligations | July 3, 2025 (interim); July 28, 2025 (final) |
| Insurance | Continued insurance programs | July 3, 2025 |
| Utilities | Adequate assurance for utility providers | July 9, 2025 |
| Taxes | Payment of prepetition tax obligations | July 3, 2025 |
| Claims Agent | Epiq Corporate Restructuring retention | July 3, 2025 |
| Complex Chapter 11 | Designation for complex case procedures | July 8, 2025 |
Trinity's motion to dismiss or convert. On July 18, 2025—just sixteen days after the petition—Trinity Broadcasting of Texas Inc. filed an Emergency Motion to Dismiss or Convert seeking dismissal of the chapter 11 case or, alternatively, conversion to Chapter 7. The motion argued the filing was made in bad faith without intent to reorganize.
The motion led to months of litigation. Discovery disputes followed. Subpoenas were served on Dr. Phil personally on August 4, 2025. Motions to compel against Peteski Productions followed, along with sanctions motions. The court entered a confidentiality agreement and protective order on August 15, 2025 to govern production of sensitive materials.
Both Professional Bull Riders and Trinity Broadcasting presented evidence supporting conversion. PBR filed a DIP Objection on July 17, 2025, and subsequently filed motions for sanctions and to compel. The matter proceeded to trial with closing arguments submitted on September 29, 2025.
Evidence destruction finding. Court documents revealed that McGraw referred to his strategy as a "gangster move" intended to reduce TBN to a minority stake. A text message told an associate that McGraw wanted Chapter 11 because it would wipe out PBR's claims.
The text was deleted before it could be preserved for litigation. McGraw could not explain to the judge why the text had been destroyed despite litigation holds that should have prevented deletion. Judge Everett found McGraw had destroyed evidence by deleting "unflattering" text messages about the strategy.
The evidence destruction finding undermined debtor credibility. In bankruptcy proceedings, parties are obligated to preserve documents relevant to anticipated litigation. Deletion of a text message describing the strategic intent behind the filing—particularly one using language like "gangster move"—was cited in the bad faith determination.
Judge Everett characterized Merit Street as "dead as a doornail" when it filed for bankruptcy.
Conversion order. On November 18, 2025, Judge Everett entered a Memorandum Decision, Order Denying Motion to Alter or Amend, and Order Converting to Chapter 7. The court also denied the debtor's motion for stay pending appeal, allowing liquidation to proceed immediately.
The court stated: "This Chapter 11 case is an anomaly... there never has been a pretense of a rehabilitation or a reorganization." The combination of pre-petition Envoy formation, evidence destruction, and the "gangster move" communications formed part of the court's findings.
Conversion based on bad faith findings is relatively rare in chapter 11 proceedings. Courts typically afford debtors latitude to attempt reorganization.
Daniel J. Sherman of Sherman & Yaquinto, LLP was appointed as Chapter 7 Trustee to administer the liquidation. Sherman filed his retention application on November 25, 2025, with no objection filed by the deadline.
Key trial and conversion timeline.
| Date | Event | Docket |
|---|
| July 18, 2025 | Trinity files Motion to Dismiss/Convert | Dkt. 100 |
| August 4, 2025 | Dr. Phil subpoenas served | Dkts. 157-160 |
| August 6, 2025 | Motion to Compel against Peteski | Dkt. 173 |
| August 26, 2025 | Motion for Sanctions against Peteski | Dkt. 303 |
| September 29, 2025 | Closing arguments submitted | Dkts. 510, 512 |
| October 6, 2025 | Order granting Motion to Compel (in part) | Dkt. 536 |
| October 29, 2025 | Status Quo Preservation Order | Dkt. 579 |
| November 18, 2025 | Memorandum Decision | Dkt. 630 |
| November 18, 2025 | Order Converting to Chapter 7 | Dkt. 632 |
| November 18, 2025 | Order Denying Stay Pending Appeal | Dkt. 633 |
Three-way settlement. On September 15, 2025, Merit Street reached a comprehensive settlement agreement involving the debtor, Peteski Productions (as DIP lender), and the Official Committee of Unsecured Creditors. The settlement was filed the same day as the Chapter 11 Plan and Disclosure Statement.
| Settlement Term | Details |
|---|
| Recovery pool | $10 million to $17 million for general unsecured creditors |
| Auction date | October 22, 2025 |
| UCC budget | $4.31 million |
| Professional carve-out | $4.75 million combined (debtor and committee professionals) |
The settlement represented an attempt to resolve multiple contested issues and establish a path to confirmation. However, the court's bad faith findings superseded the settlement efforts. The Chapter 11 Plan was never confirmed as the case was converted before the confirmation hearing could proceed.
Official Committee of Unsecured Creditors. The U.S. Trustee appointed an Official Committee of Unsecured Creditors that actively participated throughout the proceedings.
| Professional | Role |
|---|
| O'Melveny & Myers LLP | Lead Counsel |
| Berkeley Research Group | Financial Advisor |
The UCC filed multiple fee statements and participated in settlement negotiations. Berkeley Research Group provided financial advisory services focused on maximizing recoveries for unsecured creditors, and the conversion to Chapter 7 changed the distribution dynamics.
Debtor professional retentions.
| Professional | Role |
|---|
| Sidley Austin LLP | Lead Counsel |
| Epiq Corporate Restructuring | Claims Agent |
| Triple P TRS, LLC | Consultant |
| DLA, LLC | Consultant |
| Gary Broadbent | Chief Restructuring Officer |
Appeals and Post-Conversion Administration
Multiple appeals. The conversion order generated immediate appellate activity from multiple parties:
| Party | Motion | Docket | Date |
|---|
| Peteski Productions | Stay Pending Appeal | Dkt. 585 | November 3, 2025 |
| Debtor | Stay Pending Appeal | Dkt. 589 | November 3, 2025 |
| Darcy Lynn Ribman 1997 Trust | Motion to Alter/Amend | Dkt. 597 | November 7, 2025 |
| Multiple parties | Motion for Leave to Appeal | Dkt. 660 | December 2, 2025 |
| Debtor | Designation of Record | Dkt. 689 | December 18, 2025 |
| Dr. McGraw | Amended Designation of Record | Dkt. 690 | December 19, 2025 |
The court denied all motions to stay pending appeal, allowing the Chapter 7 liquidation to proceed while appeals are pending. The denial meant the Chapter 7 Trustee could begin administering the estate immediately, regardless of the appellate outcome.
Ongoing administration. Prior to conversion, the court entered a Status Quo Preservation Order on October 29, 2025, prohibiting the debtor from transferring estate property pending resolution of the dismissal motion. Multiple emergency motions for key estate expenses were filed post-conversion, with an order authorizing payment entered November 13, 2025.
A second emergency expense motion filed December 10, 2025 drew an objection the following day, leading to a status conference on December 16, 2025. As of December 2025, the case remains active with the Chapter 7 Trustee administering the estate while appeals proceed through the district court.
Industry Context and Implications
Cable television's structural decline. Merit Street's case unfolded against cable television's structural challenges. Pay TV households dropped from a peak of 105 million in 2010 to around 70 million projected for 2024. Cable TV networks commanded just 22.5% of all television viewing by August 2025—a historic low.
The demographic challenge compounds the subscriber decline. Only 16% of adults under 30 subscribe to cable compared to 64% of those 65 and older. This age skew means new cable networks launch to an older audience, with younger viewers consuming video through streaming services rather than traditional cable packages.
Distribution versus viewership. Merit Street launched to 80+ million homes—distribution comparable to CNN—yet ranked 130th among broadcast and cable outlets with 27,000 average primetime viewers. The gap between distribution and actual audience was large.
New cable networks face competition not only from established cable outlets but from streaming services that have captured younger demographics.
Implications for celebrity network ventures. Merit Street combined a 21-season daytime talk show host, an equity partner in Steve Harvey, and distribution matching established networks. The case shows those elements did not translate into higher viewership for Merit TV.
| Date | Event |
|---|
| September 2002 | McGraw forms Peteski Productions; Dr. Phil show debuts |
| May 2023 | Dr. Phil show ends after 21 seasons |
| Late 2023 | TBN-Peteski binding letter of intent (70/30 joint venture) |
| March 2024 | Steve Harvey takes equity stake in Merit Street |
| April 2, 2024 | Merit Street Media launches to 80+ million homes |
| Mid-2024 | PBR programming agreement executed |
| November 2024 | TBN lists airplane for sale ($17 million) citing cash depletion |
| November 14, 2024 | PBR terminates contract after non-payment |
| July 1, 2025 | McGraw forms Envoy Media Co. |
| July 2, 2025 | Chapter 11 petition filed; TBN lawsuit initiated |
| July 3, 2025 | Interim DIP Order; first day relief granted |
| July 17, 2025 | PBR objects to DIP financing |
| July 18, 2025 | Trinity files Motion to Dismiss/Convert |
| July 22, 2025 | PBR files $181 million claim |
| August 4, 2025 | Dr. Phil subpoenas served |
| August 19, 2025 | TBN files fraud counterclaim |
| September 3, 2025 | Second DIP motion ($10 million unsecured) filed |
| September 15, 2025 | Chapter 11 Plan filed; three-way settlement announced |
| September 29, 2025 | Closing arguments on dismissal motion |
| October 2025 | Envoy TV announces Charter carriage deal |
| October 29, 2025 | Status Quo Preservation Order entered |
What is Merit Street Media and why is the bankruptcy significant?
Merit Street Media was Dr. Phil McGraw's cable television network, launched in April 2024 as a joint venture with Trinity Broadcasting Network. The bankruptcy is significant because the court converted it to Chapter 7 after finding McGraw destroyed evidence and filed in bad faith, a rare judicial determination in a corporate bankruptcy.
What caused the bankruptcy?
Multiple factors contributed to Merit Street's bankruptcy: viewership failure (27,000 dropping to 16,000 primetime viewers despite 80+ million home distribution), partnership breakdown with TBN, PBR contract termination, and alleged $100+ million in obligations the network could not support. The company cited "severely strained liquidity" and inability to secure outside investment.
What was the "gangster move" text?
Court documents revealed a text message where McGraw described his strategy as a "gangster move" to reduce TBN to a minority stake and wipe out PBR's claims via Chapter 11. The text was deleted despite litigation holds, leading Judge Everett to find evidence destruction, a finding central to the bad faith determination and conversion.
What is Envoy Media and why was its timing significant?
McGraw formed Envoy Media Co. on July 1, 2025—the day before Merit Street filed for bankruptcy. Two weeks later, Envoy announced a carriage deal with Charter Communications. Creditors cited the timing in support of their bad faith allegations.
Why was the case converted to Chapter 7?
Judge Everett found "there never has been a pretense of a rehabilitation or a reorganization," citing evidence destruction, pre-petition formation of Envoy, and the "gangster move" communications. The judge characterized the company as "dead as a doornail" at filing.
What was PBR's claim against Merit Street?
Professional Bull Riders filed a $181 million claim—the largest in the case—after the network failed to pay for licensed bull-riding programming. PBR is owned by TKO Group (parent of WWE and UFC).
What were TBN's allegations against Dr. Phil?
TBN alleged McGraw engaged in a scheme to "fleece" the Christian broadcaster through fraudulent inducement, breach of contract, failure to deliver promised programming, and dilution of TBN's stake from 70% to 30% while increasing Peteski's share. TBN also alleged McGraw failed to make a $9 million equity payment.
What was Steve Harvey's role?
Steve Harvey acquired an equity stake in Merit Street in March 2024 through Steve Harvey Global. Merit Street acquired 300+ episodes of Harvey's NBC talk show.
What is the current case status?
The case was converted to Chapter 7 on November 18, 2025. Daniel J. Sherman of Sherman & Yaquinto LLP serves as Chapter 7 Trustee. Multiple appeals are pending from the debtor, Peteski Productions, and other parties while the liquidation proceeds.
What are the implications for future cable network launches?
Merit Street's results show wide distribution (80 million homes) alongside low viewership (27,000 dropping to 16,000). The network launched into an environment where cable commands only 22.5% of television viewing and only 16% of adults under 30 subscribe. The case highlights these constraints for new cable networks.
For additional coverage of media and entertainment industry restructurings, visit the ElevenFlo bankruptcy blog.
