The World Poker Tour Sells For $78 Million

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Friends,

In today’s edition of things you didn’t think you needed to know, here’s a good one.

Allied Esports Entertainment — a publicly-traded esports content production & facilities company — has sold the World Poker Tour (WPT) to Element Partners — a privately-held investment vehicle — for $78.25 million.

Here are the details:

• Total purchase price is $78,250,000

• Element will pay $68,250,000 in cash upfront

• Element has agreed to a revenue share of 5% of WPT-branded tournament entry fees, up to a maximum of $10 million, payable over three years after closing.

The interesting part?

The World Poker Tour last changed hands in 2019, when it was acquired by Allied Esports Entertainment for $50 million — meaning the value of the brand has climbed almost $30 million (+60%) in the two years since.

That’s great, but I know what you’re thinking:

What exactly is the World Poker Tour? And why do I care?

Let’s take a look.

First up, what is the World Poker Tour?

In the simplest terms, the World Poker Tour (WPT) partners with broadcast companies like Fox Sports and BT Sports (UK) to host, operate, and produce televised poker tournaments all over the world.

Since its inception in 2002, the WPT has grown considerably.

Today, more than 150 million people annually watch their tournaments, live events are held across five continents and broadcasted in 150 countries, and the company has awarded more than $1 billion in prize money.

Here’s a little financial transaction history:

• 2002: WPT is founded

• 2003: WPT went public

• 2009: PartyGaming purchases WPT for $12.3 million

• 2015: Ourgame International purchases WPT for $35 million

• 2019: Allied Esports purchases WPT for $50 million

Even more interesting?

While professional sports leagues around the world struggled during COVID-19, the World Poker Tour thrived.

With in-person events postponed or canceled, WPT’s online subscription platform, ClubWPT, saw new registrations jump more than 60% — bringing in more new members in the first 9 months than they did in all of 2019.

In total, online subscription revenue for Club WPT was up 56% year-over-year.

Furthermore, when live tournaments resumed late last year, the WPT television show, which has been broadcasted on linear television since 2003, recorded record distribution globally on both linear and OTT platforms.

Here’s the data (Source):

Put simply, while they certainly saw a nice pickup in linear/OTT viewership data, COVID-19 aggressively accelerated their lucrative long-term strategy — online poker.

Unlike most professional sports leagues, which inherently rely on their player’s and teams' ability to compete in person, the World Poker Tour benefited from their ability to organize, compete, and distribute their content digitally.

Similar to the e-commerce strategy of companies like Nike and Lululemon, the World Poker Tour saw their digital distribution accelerate out of necessity.

Now, the key will be seeing if they can maintain it.

Have a great day, and we’ll talk tomorrow.

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