Word slowly broke across the poker world and on Wall Street in the United States that the World Poker Tour’s stock, which is traded on the NASDAQ stock exchange under the symbol “WPTE,” had fallen this week from a high of $0.90 per share to $0.68. The reason: second quarter revenues for the tournament series were down 34% from the same period last year. The World Poker Tour saw a loss of $3.9 million last quarter, $600,000 more than the loss posted in 2007. The Associated Press, which reported the news in the middle of the week, stated that “lower per-episode license fees, under an agreement with the network, GSN, compared with the Travel Channel agreement in effect in the second quarter of 2007” were to blame.
Licensing revenue derived from World Poker Tour television broadcasts was down nearly 50% in the second quarter year over year. Revenue dove from $7.7 million in 2007 to just $5.1 million in 2008, a decline of 34%. WPT CEO and Founder Steve Lipscomb told the Associated Press, “We continue to be disappointed in our online gaming results and have begun directing resources in our growing sponsorship business. On the other hand, we continue to be encouraged by the strength of our brand in the domestic and international marketplace.”
Lipscomb noted on a conference call to investors that the WPT faces challenges in expanding its real-money poker room and Club WPT (which is available to U.S. players) globally: “We’ve also witnessed the international online gaming marketplace becoming increasingly predatory with online gaming ventures often spending more than the lifetime value of a customer in order to acquire market share, something that we are not prepared to do.”
One area that the WPT should improve on in 2009 is its licensing arrangement with Fox Sports Net to carry Season VII of the marquee poker tour. The channel is available in 80 million homes in the United States. Fox Sports Net is actually a network of 16 regional channels (such as Fox Sports New England and Fox Sports South). Every Sunday night, FSN’s national programming will contain one hour of the World Poker Tour.
Investors will be able to view the WPT during the 26 episodes that will air on Fox Sports Net. Lipscomb told Poker News Daily that you can expect to see Season VII unfold on the cable channel starting in the fourth quarter of 2008. Additionally, FSN has agreed to air Club WPT tournaments, which is the company’s subscription-based gaming outlet in the United States. In order to stay in the clear of anti-internet gambling laws such as the Unlawful Internet Gambling Enforcement Act and the Wire Act of 1961, it is considered a sweepstakes.
The World Poker Tour invades the Bicycle Casino for the Legends of Poker on August 23rd. The $10,000 Main Event’s final table will be held five days later. Last year’s Legends of Poker featured one of the most heralded final tables ever assembled on the WPT circuit. Dan Harrington, Tom Schneider, and David “The Dragon” Pham all reached the final six. Each has two World Series of Poker bracelets and Harrington won the Main Event in 2005. In the end, “Action Dan” took home the $1.6 million first place prize.
The 52-week range of the World Poker Tour’s stock peaked at $4.34. During the week of July 5, 2005, it traded at six times that value, $26.50. The World Poker Tour was incorporated in 2004 and was funded initially by poker pro Lyle Berman, who financed Lipscomb’s idea for a televised mainstream poker tour. Poker pro Mike Sexton and Hollywood persona Vince Van Patten have been the voices of the WPT since Season I.
