Dr. Phil McGraw’s Media Company Goes Bankrupt, Sues Partner TBN

Merit Street Media claims TBN ‘sabotaged’ new network, didn’t live up to commitments

On the same day it filed Chapter 11 bankruptcy, Dr. Phil McGraw’s company, Merit Street Media, filed a breach of contract suit against Trinity Broadcasting Network (TBN). The lawsuit accuses the Christian broadcasting giant of sabotage, failing to fulfill its financial obligations, and thereby placing Merit Street under a $100-million liability burden.

Video screenshot / Dr. Phil Primetime from July 8, 2025

TBN and McGraw founded Merit Street (initially called “NewCo”) in 2023 as a joint venture between McGraw’s Peteski Productions and Trinity Broadcasting. According to the agreement, TBN would own 70% of Merit Street, while Peteski would hold the remaining 30%.

Merit Street officially launched Merit TV in April 2024 with ambitions to become a major player in the cable landscape headlined by Dr. Phil Primetime and a slate of other celebrity-driven programming.

According to its website, the multi-platform media brand fully extends its reach to over 90 million television homes via cable, satellite, over-the-air broadcasts, and on-demand video and live streaming.

Yet, just over a year later, Merit Street says it has no other choice but to seek bankruptcy protection, and TBN is allegedly at fault.

According to the lawsuit, McGraw agreed to supply Merit Street with original episodes of his “Dr. Phil Show,” primetime specials, and additional content, while TBN was to handle distribution and production. In what Merit Street claims was the “linchpin of the agreement,” TBN reportedly guaranteed national distribution of Merit Street’s content through its extensive network and local stations’ must-carry rights—and then later failed to distribute, the documents say.

The complaint alleges that TBN’s “failures”  were neither unintended nor inadvertent. “They were a conscious, intentional pattern of choices made with full awareness that the consequence of which was to sabotage and seal the fate of a new but already nationally acclaimed network,” it says.

The suit also accuses TBN of abusing its position as the controlling shareholder to burden the joint venture with unsustainable financial obligations—sometimes, according to the filing, without notice or in direct violation of contractual promises.

Merit Street alleges that TBN also “sabotaged” the venture by intentionally withholding payments, resulting in the network losing its national distribution and incurring massive debt.

In April, Merit Street hired a new president and CEO. By June 2025, Merit Street had laid off 40 employees and put Dr. Phil Primetime on hiatus.

The suit claims that production services provided by TBN were “comically dysfunctional,” with Merit Street citing repeated teleprompter blackouts, malfunctioning monitors, and faulty video editing equipment as examples of broken promises.

Meanwhile, the legal dispute will continue in the U.S. Bankruptcy Court for the Northern District of Texas, where Merit Street is also pursuing claims against TCT Ministries, Inc., another entity affiliated with TBN. The court has agreed to sever and expedite a specific preference avoidance claim, examining whether a $25-million promissory note assigned to TCT Ministries should be deemed void as an improper preferential payment under bankruptcy law. Deadlines for this proceeding stretch through late July 2025, while other aspects of the case are set to proceed at a later date.

In January, mostly due to high net assets and leadership salaries, TBN’s donor confidence score fell from 45 to 25, placing it in the “Withhold Giving” category in the MinistryWatch Database. Its overall financial efficiency rating is now 2 stars.

MinistryWatch contacted TBN and Merit Street for comments. We will update the article with any replies.

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