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WPT reports revenue losses for 2007
World Poker Tour Enterprises Inc. announced Thursday that it booked a loss for both the fourth quarter and the year in 2007.
WPTE's net loss for the fourth quarter of 2007 was $1.8 million, compared to a net loss of $1.1 million for the same period in 2006. For year-end 2007 the company's net loss was $9.6 million, compared to net earnings of $7.8 million in 2006.
The company's 2007 revenue was approximately $7.6 million lower than the year before. CEO Steve Lipscomb attributed that drop to two main factors.
The first is that WPTE delivered a total of only 22 episodes of television programming, as compared to 45 episodes the year before. The difference is almost completely attributable to the Travel Channel declining to pick up a second season of the Professional Poker Tour; it had ordered the complete first-season PPT run of 24 episodes in 2006.
The second is that WPTE's 2006 revenue included a $10.2 million pre-tax gain on the sale of PokerTek common stock. There was no such buffer against losses this year.
Other, more minor factors impacting WPTE's bottom line for 2007 were lower international television licensing revenues and lower online gaming revenues. The losses were partially offset by almost-doubled hosting and sponsorship revenues.
While WPTE's earnings and revenues both dropped substantially, Lipscomb is upbeat about the shift in strategy his company began undertaking in 2007.
"We have been focused on shifting our business from a traditional media and entertainment company to a multimedia entertainment and gaming company," Lipscomb said, noting the company's partnership with online gaming network Cryptologic and its new broadcast and promotion deal with GSN.
One of the most potentially lucrative new ventures for WPTE is its exclusive 10-year agreement with the China Leisure Sports Adminstration Center to "promote and grow the sport of Poker in China." That includes a five-year renewable agreement to sponsor China's first-ever National Traktor Poker Tour, based on a traditional Chinese folk game called Tuo La Ji that has been described as a cross between gin and bridge.
WPTE expects its association with China to boost future revenues through sponsorship, television, and online and mobile subscription opportunities.
The company also expects increased revenues from its new ClubWPT.com Web site, which it describes as "an innovative subscription-based online poker club targeted to the estimated 60 million poker players in the United States."
According to the CEO, WPTE's marketing strategy for the near future will focus on product improvements, localized content and driving players to its Web site.
"With our positive momentum and world-class brand," Lipscomb said, "we are enthusiastic about the prospects for 2008 and beyond."