It’s a legal drama fit for primetime: Dr. Phil McGraw, the well-known television personality, and Trinity Broadcasting Network (TBN), a giant in Christian media, are locked in a high-stakes courtroom battle over the collapse of their joint venture, Merit Street Media. The saga, which has unfolded over the past several years, now pits allegations of fraud, betrayal, and broken promises against counterclaims of mismanagement and contractual abuse—placing hundreds of millions of dollars and reputations on the line.
The partnership began with high hopes in 2022, when Dr. Phil, seeking a new home for his signature show after what he described as censorship at CBS, approached TBN about forming a new media venture. According to Variety, TBN’s lawsuit claims that McGraw told them, “I don’t want snot-nose lawyers telling me what I can and can’t say on TV.” The two sides quickly struck a deal: on January 10, 2023, TBN and McGraw’s Peteski Productions signed a binding letter of intent to create Merit Street Media, with TBN taking a 70% stake and Peteski holding the remaining 30%. TBN paid McGraw’s company $20 million just two days later to kickstart the project.
The agreement called for an ambitious output: Peteski was to deliver 160 new 90-minute episodes of the Dr. Phil show each year over 24 to 27 production weeks. In exchange, McGraw’s company would receive $50 million annually for a decade—a potential $500 million windfall, but only if the episodes were produced as promised. Peteski further pledged that the move from California to Texas would slash production costs by at least 40%, in part by replacing unionized staff with local hires and reducing overall headcount.
But the optimism didn’t last. According to TBN’s countersuit, which was filed on August 19, 2025, in U.S. Bankruptcy Court in the Northern District of Texas, Peteski and McGraw failed to deliver even a single 90-minute episode by June 2024. Instead, the suit claims, McGraw hired dozens of staff from the original Dr. Phil show—many of them unionized and expecting California-level compensation—contradicting earlier promises to reduce costs by bringing in new local talent.
TBN alleges that, despite these failures, McGraw and Peteski tried to shift the blame, accusing TBN of not providing enough resources to produce content. The broadcaster also claims that McGraw refused to let Merit Street air old Dr. Phil episodes, which TBN wanted to use to keep costs down and attract viewers. Instead, McGraw and his team allegedly pushed Merit Street to sign expensive distribution deals with friends and celebrity associates, including Steve Harvey and Nancy Grace, a move TBN says hurt both companies.
Financially, the project became a black hole for TBN. By the end of June 2024, TBN had poured more than $100 million into Merit Street, funding everything from studio expansions and office space to a helipad in Fort Worth, Texas—reportedly for McGraw’s use. The network’s monthly outlay ranged from $9 million to $13 million, all recorded as loans since, according to TBN, Peteski had not contributed any capital toward its 30% ownership stake.
As the business faltered, tensions between the partners escalated. In August 2024, TBN proposed flipping the ownership structure, offering to reduce its share to 30% and give Peteski 70%—but only if several unresolved issues were addressed. TBN now alleges that McGraw never intended to follow through, referencing an email in which he described his plan as a “gangster move” to reduce TBN to a mere passive investor. (McGraw’s lawyers have argued that this statement was taken out of context and accessed improperly.)
The financial strain on TBN became acute. In November 2024, the network listed its company airplane for sale at $17 million, hoping to raise cash. Yet, according to the lawsuit, McGraw convinced TBN to transfer the plane to Peteski, promising to sell it and fund Merit Street, but instead used it for personal travel. As of February 2025, the plane was reportedly still unsold and under McGraw’s control.
The breaking point came on July 2, 2025, when Merit Street Media filed for Chapter 11 bankruptcy protection. This move, TBN claims, blindsided the network, which still held two out of three seats on the company’s board and had not approved the filing. At the same time, Peteski and McGraw established a new entity, Envoy Media Co., incorporated just a day before the bankruptcy. TBN alleges that former Merit Street employees are now working for Envoy, suggesting a calculated effort to shift assets and operations away from the failed joint venture.
Merit Street’s bankruptcy was accompanied by a lawsuit against TBN, alleging breach of contract and abuse of its position as controlling shareholder. TBN’s response was swift and forceful: in its countersuit, the broadcaster accused McGraw and Peteski of orchestrating a “years-long fraudulent scheme” to “fleece TBN, a not-for-profit corporation, to enrich McGraw, his associates and affiliates.” TBN’s complaint states, “TBN is confident that the truth will set it free, and result in Peteski and McGraw being held accountable for their reprehensible conduct.”
The war of words has only intensified. In a statement to Variety, a representative for Peteski Productions called TBN’s lawsuit “riddled with provable lies” and accused the network of “lawfare litigation strategy designed to distract people so no one notices when TBN ultimately is held accountable for walking away from its commitments here.” The rep also insisted, “A simple check of IMDb tells the real story—we created more than 200 episodes. People lost their jobs and Peteski Productions has incurred millions of dollars of losses because of TBN’s bad behavior. We will continue to fight for justice in this case.”
At the heart of the dispute are dueling narratives about who is responsible for the partnership’s failure. TBN maintains that McGraw and Peteski misrepresented their plans, failed to deliver promised content, and misused company assets. Peteski, for its part, claims TBN failed to live up to its obligations and sabotaged the venture. Both sides are seeking damages and legal vindication, with TBN also asking for a rescission of its deal with Peteski and for its designated board members to be restored to Merit Street’s board.
As the case moves forward in bankruptcy court, the legal filings are sure to uncover more details about what went wrong behind the scenes of one of television’s most ambitious (and expensive) partnerships. For now, the only certainty is that the fallout will reverberate far beyond the halls of Fort Worth—and the reputations of both Dr. Phil and TBN hang in the balance.
