Dr. Phil McGraw, the television personality who once dominated daytime talk shows, now finds himself embroiled in a legal and financial saga that reads more like a high-stakes drama than a scripted episode. The latest chapter in this unfolding story began on August 19, 2025, when the Trinity Broadcasting Network (TBN) countersued McGraw and his company, Peteski Productions, alleging a years-long fraudulent scheme tied to a $500 million production and distribution deal gone awry. This legal move comes just weeks after McGraw’s fledgling network, Merit Street Media, filed for Chapter 11 bankruptcy on July 2, 2025, and then attempted to halt the proceedings as the mounting costs became too much to bear.
According to Deadline, TBN’s countersuit paints a picture of deception and urgency, accusing McGraw of creating “a false sense of urgency” and making false representations to secure a lucrative deal in early 2023. The faith-based broadcaster claims that McGraw misled them about Merit Street Media’s viewership, advertising revenue, library ownership, and production costs. In the words of TBN’s legal filing, McGraw’s actions were part of a “years-long fraudulent scheme that they developed and executed to fleece TBN, a not-for-profit corporation, to enrich McGraw, his associates and affiliates.”
The countersuit further alleges that McGraw told TBN that CBS would pay him $75 million per year to renew his contract—a claim TBN says was untrue. He reportedly pressured TBN to “immediately sign some form of binding agreement with Peteski and immediately pay him $20 million as a gesture of good faith to show TBN’s ability to pay and commitment to the deal.” Anything less, McGraw allegedly warned, would be a “deal killer.” TBN’s lawyers argue that they acted on these assurances, only to have the grand plans for a Texas-based media venture unravel in less than a year.
Launched in April 2024, Merit Street Media was envisioned as a bold new voice on the national stage, with millions invested in multi-platform and streaming distribution. But by early July 2025, the joint venture was on the verge of collapse. Merit Street Media, in its own breach of contract suit, claimed that TBN refused to honor its commitment to transfer must-carry rights, effectively stripping the new network of national distribution. “This fresh voice on the national stage is inexorably going dark, going off the air because TBN has refused to honor its commitment to transfer its must-carry rights and thereby provide national distribution for the network,” the company stated in court filings.
As reported by Just The News, TBN’s countersuit did not mince words, accusing McGraw of “reprehensible conduct” and quoting him as describing his own approach as a “gangster move” and “11th-hour poker.” The network is seeking a mix of damages, injunctions, and enforcement of stock amendment deals in federal court in Texas. “TBN is confident that the truth will set it free, and result in Peteski and McGraw being held accountable for their reprehensible conduct,” the legal filing declared.
McGraw’s side, however, has not remained silent. A spokesperson for Peteski Productions fired back, dismissing TBN’s lawsuit as “riddled with provable lies” and part of a “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 spokesperson pointed out that, contrary to TBN’s claims, Peteski Productions had produced more than 200 episodes for Merit Street Media. “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,” the spokesperson told Just The News.
The legal battle has also spotlighted the financial turmoil at Merit Street Media. After filing for bankruptcy in July, McGraw’s company soon tried to cancel the Chapter 11 proceedings, citing the prohibitively high cost of legal fees required to remain under court protection. The Wall Street Journal reported that the company was unable to pay the legal fees needed to stay under bankruptcy court protection, leaving it exposed to creditors and further complicating the already tangled dispute with TBN.
The countersuit is only the latest escalation in a relationship that began with high hopes but deteriorated rapidly. The initial deal, struck in early 2023, was supposed to be a win-win: TBN would gain a new, high-profile partner in Dr. Phil, fresh off his 21-year run on CBS that ended in 2023, while McGraw would secure the resources and distribution needed to build his next media empire. But according to TBN, the deal was based on misrepresentations and pressure tactics that ultimately left the not-for-profit broadcaster out millions and facing a failed joint venture.
For its part, Merit Street Media argues that TBN’s refusal to transfer must-carry rights was the fatal blow, effectively cutting off the network’s ability to reach a national audience. The company claims that, as a result, it was left to pay $100 million in third-party debts and had no choice but to file for bankruptcy. The dispute over who is to blame has now spilled into the courts, with both sides accusing the other of bad faith and seeking to shift responsibility for the spectacular collapse.
The case has also drawn attention for its colorful language and the high-profile personalities involved. TBN’s legal team, represented by Foley & Lardner LLP, has not shied away from dramatic phrasing, while McGraw’s own words—describing his negotiation tactics as a “gangster move” and “11th-hour poker”—have only added fuel to the fire. Both sides are now locked in a legal battle that could have far-reaching implications for the future of faith-based broadcasting and celebrity-driven media ventures.
As the legal proceedings continue, the fate of Merit Street Media hangs in the balance. What began as an ambitious partnership between a legendary talk show host and one of the nation’s largest religious broadcasters has devolved into a bitter courtroom fight, with hundreds of millions of dollars and reputations on the line. With both parties digging in their heels and the courts yet to weigh in, the saga of Dr. Phil and TBN is far from over—and the lessons from this media meltdown may echo across the industry for years to come.
