Like the name says..they are a clearing house for magazine publishers. They sell millions of subscriptions for magazines. So they have plenty of money. And giving away money in a big sweepstakes is a way to make sure we all know their name. And we do.
If you ever got their mailings, they sell all sorts of things at outrageous prices. Magazines is a very small part of the product offerings. People buy stuff because they think it improves their chances of winning. One contest will generate around 20 of these mailings to each entrant. The stuff they sell is marked up 2 and 3 times above what it sells for in mail order catalogs, so they make millions on this racket. And, they don't always give out the prizes -- they pick one winning number and if the person with that number didn't return the application, no one wins at all.