Background of the Lawsuit
Last month, Phil McGraw’s media company, Merit Street Media (MSM), filed for bankruptcy and initiated a lawsuit against its distribution partner, Trinity Broadcasting. In response, Trinity Broadcasting has brought a countersuit against MSM, alleging that McGraw misled them into a 10-year, $500 million partnership with false promises.
Claims of Deception
Trinity Broadcasting contends that McGraw assured them he would produce new episodes of his renowned talk show, Dr. Phil, as a part of their agreement. However, they claim he has yet to deliver a single new episode, according to The Hollywood Reporter.
Terms of the Deal
In its countersuit, Trinity outlines that McGraw misrepresented his rights to Dr. Phil and required a $20 million payment from them in exchange for his commitment to produce new episodes. He allegedly threatened that, without their partnership, he would remain with CBS, who was reportedly willing to pay him $75 million each year.
Financial Commitments and Results
After the deal was completed, Trinity Broadcasting invested millions into Merit Street Media. However, it soon became apparent that McGraw was unable to deliver the anticipated viewership numbers, product integrations, and advertising revenues that had been promised.
Allegations Against McGraw
Trinity has accused McGraw of several breaches of agreement, including:
- Hiring former Dr. Phil guests instead of local Texas talent, which he had originally promised.
- Pressuring the joint venture to secure lucrative deals with his close associates, including Steve Harvey, Nancy Grace, and Chris Harrison.
- Manipulating the partnership to relinquish Trinity’s controlling share of Merit Street while retaining his rights to the Dr. Phil library for his new company, Envoy.
Legal Actions
As a result of these actions, Trinity has filed for fraud and breach of contract, seeking a court ruling to clarify both companies’ rights under their agreement. They also demand that McGraw surrender his collection of previous Dr. Phil episodes as part of Peteski’s terms for receiving a 30 percent equity stake in Merit Street.
Counterclaims from Merit Street Media
In turn, Merit Street Media has responded with its own lawsuit against Trinity for breach of contract. They allege that Trinity engaged in intentional actions that sabotaged the success of their network. Merit Street claims that Trinity withheld payments and provided inadequate production services, laying the blame for their financial troubles at Trinity’s feet.
