On Tuesday afternoon, World Poker Tour Enterprises announced their third quarter 2008 earnings, which were significantly down overall versus the same time period of 2007. Yet both of the executives who were on the investor call on Tuesday were confident that WPT Enterprises could turn around with the repositioning of the company in the coming year.
Founder and Chief Executive Officer Steve Lipscomb and Chief Financial Officer Thomas Flahie were present for the conference call for investors and reported on some of the key highlights of the third quarter. “There is a great interest in the World Poker Tour, both domestically and internationally,” Lipscomb stated.
Lipscomb talked in depth about the termination of the contract between WPT Enterprises and Cryptologic, who had been operating the online poker room WPTOnline.com for the organization. “We couldn’t get a foothold in the marketplace, which is very competitive,” Lipscomb admitted. “Thus, we decided that, by repositioning the company and exiting the real money online poker world, we would be able to focus our resources on domestic and international television sponsorship, Club WPT and WPT China.”
Club WPT, the monthly membership based poker room, “has been seeing considerable growth,” Lipscomb revealed. In the third quarter of 2008, membership is sitting at 6500 players with another 38,000 “free” players on the site, up over the second quarter numbers of 3000 members and 20,000 “free” players. “It is our goal by the end of the fourth quarter to improve those numbers to 16-20,000 members of Club WPT. We are quite pleased with the progress and the program that currently airs on Fox Sports.”
The move of the World Poker Tour to Fox Sports Network was also an issue of discussion. Lipscomb noted that “the move from licensing based sports programming to a sponsorship based program has been affected by the recent downturn in the global financial community.” However, Lipscomb stated there is “significant interest” in the sponsorship of the WPT and 26 new one hour episodes featuring Season Seven will start airing on FSN starting in December 2008.
The efforts of WPT Enterprises in China seem to be paying off as well. Lipscomb informed listeners on the conference call that the second season was in full swing, with fifteen tournaments on the schedule and a scheduled Grand Championship in Beijing in June 2009. WPT China features Traktor Poker, a version of poker popular in the world’s largest country, which is fully licensed through the Chinese sports authority.
CFO Flahie was left with the task of reporting on the actual numbers, which were affected by the move of the WPT broadcasts from the Travel Channel to the Game Show Network. Revenues in the third quarter of 2008 decreased to $2.8 million, compared to $4.4 million in the same period in 2007, primarily a result of a decrease in domestic television license fees and lower domestic sponsorship fees. Both men, however, were optimistic about the fourth quarter of 2008 and the potential it held for the company.
For the fourth quarter of 2008, assuming that the first four episodes of Season Seven of the WPT television series air in December on Fox Sports, revenues are expected to be in the range of $3.0-$3.4 million and the net loss is expected to be in the range of $2.9-$3.3 million. WPT Enterprises also expects to receive host fees and domestic and international sponsorships for the WPT and for the continuation of “Club WPT” on FSN, which should drive more membership to their online site.
On the bright side, WPT Enterprises has no debt at this time and has $20.4 million in assets, of which half is in auction rate securities. While the economic report was down across the board, WPT Enterprises is still a viable business and, with an upswing in both the financial world and their poker endeavors, could bode for future success.