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WPT reports revenue drop
World Poker Tour Enterprise Inc. has been growing and stretching in the past few months with episodes delivered and new deals made around the world. However, the company still had to report a drop in revenue for the second quarter of 2007 compared to the same quarter last year.
Total revenues for the second quarter were $7.7 million, whereas they were $11 million in the same period of 2006. WPTE attributes the 30% drop to delivering fewer domestic television episodes in the 2007 period.
During the second period, WPTE delivered nine episodes of the World Poker Tour Season 5. The company also signed a broadcast deal with GSN for Season 6 of the WPT as well as a partnership agreement with Grup Peralada, the largest operator of casinos in Spain.
Taking the WPT broadcast even further around the world, WPTE also entered into distribution agreements for Season 4 and 5 of the WPT in the Netherlands and Australia.
Also affecting the bottom line for the company in the second quarter was the re-launch of the company's online poker site.
Because WPTE ceased internal development of the gaming platform, it had to write off $2.3 million in assets related to the online gaming part of the business. Aside from that, the net loss for the second quarter of 2007 was $1.1 million, or 5¢ per share.
There was also a decrease in online gaming revenue for the company due to ceasing operations to switch to CryptoLogic. Player activity was down as a result.
During the second quarter, WPTE also entered into an agreement with the China Leisure Sports Administrative Center, that will help take the brand further into the Asian market.
CLSAC is the government sanctioned body that oversees poker and other leisure sports throughout China, and WPTE will now be its exclusive marketing and sponsorship partner for Traktor Poker.
Traktor Poker, or Tuo La Ji, is China's most popular card game according to WPTE.
"The World Poker Tour will be identified with one of the most popular activities in China, build significant brand awareness throughout the country and derive potential future revenues from sponsorship, television and certain online opportunities," said the WPTE in a press release.
WPTE is predicting revenues in the range of $4 to $4.5 million for the third quarter of 2007 with a positive outlook for 2007 in general.
"We set out several initiatives for 2007 and are pleased to report that we've made significant progress on each," said Steve Lipscomb, WPTE president and CEO.
"At the beginning of the second quarter, we announced a multi-year deal with GSN setting the stage for the broadcast and promotion of Season VI of the World Poker Tour television series. In June, we successfully re-launched our online gaming site on the CryptoLogic platform."
Some of the expectations the company has for the third quarter and the rest of the year include delivering the remaining three episodes of Season 5 of the WPT on the Travel Channel as well as beginning broadcast of Season 6 on GSN with the first five episodes in the fourth quarter.
The company also plans to recognize host fee and sponsorship revenues as WPT episodes are aired in the third quarter, and to increase sales and marketing efforts for its online gambling ventures in September.
"With this positive momentum and our world-class brand, we are enthusiastic about the prospects for 2007 and beyond," Lipscomb said.