World Poker Tour (WPT) up for sale

The WPT has announced that it has released confidential information to multiple parties, leading to speculation that the company is on the selling block. WPT CEO Steve Lipscomb recently told the Wall Street Journal that, “…the WPT is not for sale. But of course everything is for sale.” Lipscomb went on to confirm that information has been released to interested parties: “We’ve had discussions with, and exchanged documents with, some companies that have expressed an interest.”

Created in 2003, The WPT brand is a shell of what it was in its glory days of 2005: The company once estimated to be worth $500 million, now has a projected net worth of $25 million. This includes almost $18 million in cash assets that would be immediately available to the new owners; so the real price tag of the WPT is about $7 million.

This has led to sponsorship problems for the WPT; Lipscomb explained the dilemma the WPT faces when negotiating with major sponsors: “The inevitable question when someone is about to pay you $3 million, or $4 million, or $5 million, is (for them) to look and say, ‘Why don’t I just buy your company?’

How bad have things gotten for the WPT? In 2005 the stock hit an all-time high of $26: The current value of the stock is around $1.25. The WPT did generate positive cash flow for the first quarter of 2009 (the first time in 2 years) and Lipscomb is confident they will finish in the black for the year. The tumbling stock price, along with the recent earnings, makes the WPT a prime target for acquisition.

A major problem for the WPT has been the copycat telecasts. Many other organizations are able to produce a high quality poker show without the overhead of the WPT. Unfortunately, poker is not a Hollywood blockbuster, and sinking tons of money into the product does not make a more watchable or better produced show. Although these telecasts do not sport the star-studded lineups and million dollar prize-pools that the WPT offers; at some point poker is poker, and fans of the game will watch what is available.

Wall Street Journal columnist Brett Arends cited the WPT’s inability to convert its brand into a reliable revenue stream. Arends cites mediocre merchandise sales (most poker enthusiasts can get many of these products, from t-shirts to chip-sets free from online poker-rooms) and missteps by the company -a failed venture in China, and letting overhead costs spiral out of control-as key factors in the WPT’s decline.

Rumors of the possible sale have been rampant, and while many people believe the interested parties to be online casinos, only bwin has been named as a possible buyer; which has not been confirmed or denied at this time.

The Austrian based Bwin is primarily known as a sports-book, but also has an online casino and poker-room: In addition to taking some 300,000 bets daily in their sports-book. The WPT has not confirmed the name of any of the companies it has supplied information to, and will not confirm or deny that a sale is in the works.