On the same day that World Poker Tour Entertainment (WPTE) officials announced that cable station Fox Sports Net would pick up the rights to carry Season VIII of WPT programming, the company released its financial results for the fourth quarter of 2008 as well as the full calendar year.
The company posted $2.6 million in revenue during the fourth quarter of 2008, down from $5.1 million during the same period in 2007. WPTE officials attributed the dramatic downswing to television episode release dates. Season VI aired its inaugural four episodes during the fourth quarter of 2007, while the first episodes of Season VII did not hit the market until January of 2009. Consequently, a programming gap occurred during the latter part of 2008, leading to lower revenues.
Product licensing revenues dropped from $1 million during the final quarter of 2007 to $569,000 during the final quarter of 2008. WPTE claimed this was a result of “fewer international territories accepting license arrangements and the substitution of sponsorship arrangements for license arrangements in many territories.”
Officials revealed that the company’s gross margin on its television programming is 65%. In total, the company posted a $3.3 million net loss during the fourth quarter of 2008, nearly double the $1.8 million net loss posted during the same period one year before. Again, company officials attributed the difference to the delayed airing of its Season VII tournaments on Fox Sports Net. The delay may have been due to last-minute scrambling after GSN abruptly declined to pick up the option on Season VII after it had begun airing Season VI. In July, Fox Sports Net entered into an agreement to air Season VII.
For the 2008 calendar year, WPTE revenues fell to $15.5 million from $21.7 million the year before. The financial statement notes that four fewer WPT episodes aired during 2008 and the “per episode license fee” fell by $177,000 for 17 installments. Its Net Loss rose to $12.5 million in 2008 in comparison to a Net Loss of $7.4 million in 2007. The company also sunk a $1.9 million non-cash charge into mobile developer Cecure Gaming “due to difficulties Cecure Gaming is having in obtaining capital to finance their business development.” Last November, WPTE shut down its for-profit online poker room, which did not cater to the U.S. market.
Despite the sluggish worldwide economy, WPTE officials are expecting a robust 2009. Fox Sports Net will air 12 episodes of Season VII during the first and second quarters. Two episodes will air in the third quarter to round out the 26 show series. In addition, the company expects to reap foreign sponsorship revenues for WPT Seasons IV through VII and the Professional Poker Tour during the fourth quarter. Season I of the WPT China National Traktor Poker Tour will air during 2009 and production for Season II is expected to be wrapped up by June. Three episodes of the ClubWPT series on Fox Sports Net will be filmed during the current quarter. ClubWPT, a subscription-based online poker site, is currently available in 38 states.
WPTE signed FullTiltPoker.net as its Season VII title sponsor. As a result, the site receives extensive on-screen and on-felt advertising. There has been no indication as to whether the company will welcome the educational online poker room back for Season VIII. Poker News Daily Columnist Mike Sexton and Vince Van Patten have brought the WPT into millions of households since the tournament series debuted in 2003. Season VII currently airs on Fox Sports Net on Sunday nights, although it is frequently preempted due to local sports programs. Replays of the show typically run on Mondays and Wednesdays for those markets. The WPT recently launched a Channel Finder to assist viewers in tracking down its episodes from all seven seasons.
At the time of writing, WPTE stock was trading down $0.05 on the day to $0.38. It is listed on the NASDAQ Stock Exchange under the same acronym. The company has until May 18th to raise its stock price in accordance with NASDAQ market rules.
