Dr. Phil Loses Bankruptcy Battle As $500 Million TV Venture Collapses Into Liquidation

Celebrity television personality and producer Dr. Phil McGraw has suffered a major courtroom defeat over the fate of his failed television network, Merit Street Media. A federal bankruptcy judge has ruled that McGraw's company will be liquidated under Chapter 7, rejecting his attempt to reorganize it through Chapter 11 protection. The decision ends Merit Street's short, chaotic life and caps an extraordinary $500 million collapse for a venture once touted as the next stage of Dr. Phil's media empire.

Importantly, this ruling does not mean Dr. Phil has filed for personal bankruptcy. The case involves a corporate bankruptcy, not his individual finances. McGraw remains personally very wealthy, with a net worth of $400 million, built over decades as one of television's highest-paid figures. At his peak, he earned $80–90 million per year from "The Dr. Phil Show" and related ventures. He earned at least $600 million in total income from his television show alone.

The decision marks a rare public setback for McGraw, whose transition from daytime TV titan to network owner has been rocky. Launched in 2024 with promises of wholesome, family-oriented programming anchored by "Dr. Phil Primetime," Merit Street was meant to extend his media dominance. Instead, it collapsed in less than a year amid lawsuits, unpaid contracts, and accusations that McGraw used the bankruptcy process to protect his own interests. Maybe this is Karma for unleashing Danielle Bregoli onto the world.

(Photo by Ray Tamarra/GC Images)

The $500 Million Dream

The $500 Million Dream

Merit Street Media was announced in 2023 as a joint venture between McGraw's company, Peteski Productions, and the Trinity Broadcasting Network (TBN), one of the largest Christian broadcasters in the U.S. Under the deal, TBN would provide production facilities and distribution while McGraw would supply original content anchored by a nightly talk show, "Dr. Phil Primetime." The venture was reportedly valued at $500 million over ten years, pitched as a family-friendly network offering inspirational programming and celebrity-driven talk shows.

When it launched in April 2024, Merit Street claimed to reach 80 million homes and featured personalities like Steve Harvey, Nancy Grace, and Chris Harrison. Behind the scenes, the company was already struggling. TBN accused McGraw of failing to deliver promised programming and misrepresenting cost savings from moving operations to Texas. By mid-2024, creditors were piling up, and Professional Bull Riders (PBR) claimed Merit Street owed it $181 million in unpaid fees.

By July 2025, the network was out of money. Merit Street filed for Chapter 11 bankruptcy protection, and McGraw simultaneously sued TBN for breach of contract. TBN countersued, accusing him of fraud, self-dealing, and sabotaging the joint venture to regain control.

The Bankruptcy Battle

Court testimony revealed that just one day before the bankruptcy filing, McGraw created a new company called Envoy Media, seemingly positioned to absorb Merit Street's staff and programming. U.S. Bankruptcy Judge Scott W. Everett called the situation "an anomaly," saying there was "never a pretense of rehabilitation." He found that McGraw deleted text messages, favored certain creditors, and that Merit Street's restructuring officer had been working for Envoy at the same time.

"The Chapter 11 case is a broken three-legged stool," Everett said. "Mr. McGraw deletes unfavorable text messages he doesn't want me to see, vows to pay favored creditors no matter what the court does, and vows to wipe out unfavored creditors."

Everett converted the case to Chapter 7 liquidation, stripping McGraw of control and placing Merit Street's assets under a neutral trustee. "There is no hope for rehabilitation," he concluded.

Deleted Texts and Courtroom Fallout

A deleted text message exchange proved especially damaging. McGraw had assured longtime friend and investor Jamie Ribman that his $5 million investment was "safe" and would be reimbursed "no matter how the court rules." The message, recovered from another phone, became central to the judge's finding that McGraw was manipulating the process to favor insiders.

The court also found that several creditors on Merit Street's committee had personal guarantees from McGraw, giving them unfair advantage. "Creditors can have faith that a trustee will be fair and impartial," Everett said in his ruling.

Both TBN and PBR celebrated the outcome. "We're grateful the court saw through this scheme," PBR said in a statement. "Dr. Phil's Merit Street Media reneged on its agreement after just five months and then attempted to skirt obligations through a bankruptcy the court rightly called an anomaly."

The Envoy Media Connection

As Merit Street crumbled, McGraw quickly launched Envoy Media, incorporated the day before the bankruptcy filing. The new company markets itself as a "next-generation media platform" producing live news and talk shows. Earlier this month, Envoy signed a carriage deal with Charter Spectrum, reaching roughly 12.6 million homes in 41 states.

Critics and creditors see Envoy as Merit Street reborn. Court filings show that several Merit employees were rehired by Envoy, and McGraw proposed funding Merit's bankruptcy with loans from Peteski Productions—his own company—so he could buy back its assets. Judge Everett cited this as proof McGraw was "juicing one business to launch another while leaving creditors behind."

What Comes Next

Following the ruling, McGraw's Peteski Productions vowed to appeal, calling the decision "improper" and "unfounded." In a statement, the company said, "We take great exception to the court's assertions regarding the alleged destruction of evidence, which simply did not happen. Dr. Phil is proud of his efforts to protect Merit Street employees and to resolve this unfortunate situation."