WPTE 2008 First Quarter Loss Widens
Published on 09 May 08 10:28 by Drakhor
The World Poker Tour still operates in the red. The loss in the first quarter this year even exceeded the combined losses of 2007.
After the WSOP, the World Poker Tour is the biggest and most influential tournament series of the world. But ever since the UIGEA, the Tour struggles with sagging numbers in almost every area. Considerably less participants joined the events last year, which lead to a reduction of Tour events. Despite this act, not every tournament will be televised in the new season, and the income per broadcasted tourney decreased from almost $450,000 to
$300,000. Furthermore, the stock share is about to hit rock bottom.
The result is a loss of $2.8 million in the first quarter of 2008 (total loss in 2007 amounted to $2.3 million), despite the fact that in comparison to the same period 2007, the revenues increased by 10%. This was mainly caused by the higher returns of the TV commercialization outside of North America though.
Management justifies the new high losses mainly with the company's restructuring. Part of this reshuffle is the WPT China National Traktor Poker Tour. As the US market seems to be saturated, World Poker Tour Enterprises now tries its luck outside of America. Unlike the APPT, the WPT does not offer a simple poker tour in the Far East. The focus of the WPT China lies on the traditional card game Traktor.
The outlook on the remaining year is also rather disillusioning. The revenues are supposed to be increased once more, but a real reversal of the trend is only expected to happen next year at the earliest.
Interesting to know is the fact that despite all these grim numbers, the management still awarded itself a 20% increase in executive compensation and bonuses over the last year. CEO Steve Lipscomb explained that while stock options had been used in
the past to attract and retain executive talent, options were no longer
effective because of the lackluster performance of the underlying
stock. In this critical transition year, it was felt that increased
salaries and bonuses for key executives would be used to assure
retention, which would be partially offset by cuts in other headcount.
Nonetheless it shouldn't be overlooked that despite all these problems, the WPT is still one of the most attractive poker series of the world. Many WPT events are still well-attended, and the $25.000 finale in the Bellagio is unabatedly one of the prinicpal tourneys in the poker schedule.
The blind structure is deemed to be the best the tourney world has to offer and will certainly attract many players to the tables in the future. Especially participants of the EPT rave about the longer blind times at the WPT.
Furthermore the WPTE included in their report that they have access to over $31 million in "cash and cash equivalents".
Here's a small YouTube trailer about the WPT China National Traktor Poker Tour:
