Tuesday, February 17, 2009

World Poker Tour: Season 8, Company Sale?

WPT Enterprises announced that Fox Sports Net will broadcast season 8 of the World Poker Tour. FSN Executive Vice President George Greenberg said season 7 has been "one of the most popular programs on FSN." They plan 26 one-hour espisodes, the same as season 7.

WPT Enterprises also released their fourth quarter and 2008 results and held an earnings call. Generally, things aren't going well: they continue to burn through their cash. Some highlights:
  • They're looking into strategic alternatives and providing confidential information to certain parties, code words for discussing a sale of the company. Further hints come from the company's recent 8-K, which reveals CEO Steve Limscomb's compensation in the event of a sale: 5% of any excess over the fair market value of the company's financial assets plus six months' severance.
  • They don't plan to continue to produce Club WPT shows, as the $1.2 million they spent for 13 episodes wasn't cost-effective marketing. They'll shift to online marketing efforts, such as affiliates.
  • WPT China hasn't produced much revenue and they're looking for a partner, as "The cash needs to support the growth in this business are greater than the Company is willing to expend."
Separately, it looks like there will be a WPT Venice during season 8. Their only overseas tournament of season 7, Barcelona, was not televised.

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Posted by Self Made at Tuesday, February 17, 2009
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9 comments:

  1. A Yahoo! Finance message board poster's comments on Steve Lipscomb's compensation:

    As much as I would like to see a sale of this company, it absolutely disgusts me that Lipscomb will receive even further compensation if it happens.

    Let's see, they pay him $500K annual salary and awarded him 2.3M shares when the company was taken public. He then dumped 700K of these shares at an avg price of about $19 for a profit of around $13M before setting off to destroy 95% of shareholder value over the next three years. He then repurchases 375K share at an avg price of around $.35, and is exchanged 500,000 new options at current market prices to replace the 600,000 he was granted that had a strike price of $8. To top it off, he's then granted an additional 5% stake of the gross proceeds of the company (minus cash) should it be sold.

    I must ask, what has he accomplished to be awarded such additional compensation? This is a complete outrage, and just another grotesque example of coporate governance in this day and age.
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  2. The WPT has added a second online-poker-room-sponsored European tournament for season 8: Marrakech, sponsored by Chilipoker. It will take place in October, and the three-year deal contemplates televised broadcasts. See the WPT and Chili sites.
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  3. The WPT issued a press release about the Venice tournament. It will run May 5-10. bwin will be broadcasting it on the web. The tournament has its own web site.
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  4. According the the WPT's latest Proxy Statement, insiders own over 30% of WPTE stock: Steven Lipscomb 9.5%, Lyle Berman 11.4%, and Bradley Berman: 10.2%. I'd seen them buying a while back, which indicates they believe it's undervalued.
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  5. Note re a possible sale: we ran a poll on it a while ago, and the results were:

    65% of you think the WPT will be sold; 22% of you think it will be out of business a year from now; and 14% of you think it will remain an independent company. Of those who think the WPT will be sold, 2/3 think it will be sold to Full Tilt Poker and 1/3 think it will be sold to someone else.
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  6. Add Spain and Cyprus to the list of European WPT events coming up after season 7 finishes April 25 (finishes playing, not airing). Neither one will be televised in the US, though the latter is expected to be televised regionally.
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  7. What about the WPT North American Poker Championship in Niagara Falls, Canada? It has been held in October the past three years, but it seems to have been replaced by WPT Marrakech (October 12-19) and the new WPT Indiana at Hollywood Casino Lawrenceburg in January.
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  8. A press release provided more details about the WPT Cyprus.
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  9. They issued a press release about Slovakia, the fifth of these non-televised overseas tournaments.
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