Poker for Profit: WPT announces First Quarter 2006 Results
During a teleconference on May 4th, World Poker Tour Enterprises officials gathered for what was a historic day for the company overall and also demonstrated that the reported 'demise' of poker may be greatly exaggerated.
"Our footprint continues to expand internationally," firmly stated Steve Lipscomb, the CEO and founder of the World Poker Tour and WPTE. "After the success of the WPT Championships in April, when 605 participants from forty nations vied for one of the most prestigious titles in poker, the World Poker Tour and WPTE has been able to continue to make a significant impact on the game internationally as well as in the United States. We are very excited about the future and our growth along with it."
Lipscomb has a great deal to be excited about after the release of the financial statements for the first quarter of 2006. For the first time in the history of the five year old company, WPT Enterprises turned a profit for the period ending April 2nd. The company showed a 57% increase in revenues when compared with the same period of 2005, from $4.1 million last year to $6.5 million this year. WPT Enterprises was able, for the first time, to announce a net profit of $3.6 million versus a $1.6 million loss in the same timeframe of 2005. Several reasons for the success were made apparent as Mr. Lipscomb and the Chief Financial Officer of WPT Enterprises, Todd Steele, spoke in depth about the current state of the organization.
The delivery of more episodes of Season Four of the WPT to the Travel Channel versus the same time period of 2005 has helped the bottom line, but the additional pickup of the first season of the Professional Poker Tour for broadcast by the network has allowed WPT Enterprises to offset the production costs that had been weighing on the company's bottom line. The PPT will be broadcast starting in July and will feature 24 programs featuring the "all-star" poker tour. Additional success, including the continued growth of international licensing, the WPT online poker room, and the continued factor that the company has no outstanding debt all leads to a bright future for WPT Enterprises.
"Marketing the World Poker Tour brand has been a significant catalyst for our success," remarked Steele. "Currently we are licensed for broadcast in nearly 150 countries, with recent agreements for broadcast in Germany, Russia and Norway. WPT Online continues to grow and we look for WPT Online to become the ultimate online aggregator for those who are looking for poker information. Finally, we have licensed the WPT brand to over forty different outlets and are enjoying a considerable amount of success from these arenas."
While the historic announcement of a profitable quarter was significant, Mr. Lipscomb and Mr. Steele also addressed the decision of the Travel Channel to not pick up the option on a second year of the Professional Poker Tour. While such a decision could be viewed as detrimental, both gentlemen were quick to point out that it only opened more doors for the WPT brand to be seen on television.
"Before we came to the agreement with the Travel Channel regarding the PPT, we were ready to move forward with ESPN," Lipscomb said during the conference. "We had a three year deal to expand the WPT brand with the PPT to the network, but agreed to doing the first season of the PPT on the Travel Channel to settle our legal actions. With the Travel Channel deciding not to pick up the option on Season Two, this allows us to diversify our product by displaying WPT Enterprises productions on another network. The Travel Channel, by agreement to cancel their option, will expand its broadcast of current WPT events and will also broadcast more special productions from us in the future."
"We should have an agreement in place soon and we will start filming the PPT's second season in the third quarter of 2006," continued Lipscomb. "With the broadcast of the PPT on the Travel Channel now and elsewhere in the future, we are defining our commitment to the success of the PPT and look to create a third major poker tour for television viewers."
Television ratings were also brought up and both Mr. Lipscomb and Mr. Steele pointed out the volatility of the television world. "Currently we're running up against that little show called "American Idol," joked Lipscomb. "We have seen, once that show ends it season, that ratings come up nicely for the WPT broadcasts. Poker on television ranks in popularity behind only NFL football and NASCAR in the United States, thus we believe it is inaccurate to say the poker 'boom' is done. The marketplace is obviously there."
The news of a profit being shown for WPT Enterprises in the first quarter of 2006 is indeed a shot in the arm for the company. Forecasts indicate that the future does look good for the company as they continue to aggressively move further into both the American and the international markets. Through not only their television productions but also their merchandising and online operations, WPT Enterprises continues to look towards being the leader regarding poker in today's world. "We are in a very solid place," commented Lipscomb. "We're very healthy and robust and look to the remainder of 2006 with excitement."
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