World Poker Tour Purchase Price Driven to $105M
The World Poker Tour seems to change hands as often as the 24/7 title in the WWE. This time around, there are multiple players looking to purchase the global poker tour. Element Partners had been pegged as the next owner of the WPT, but Bally’s decided to crash the party at the last minute with a competitive bid.
Element then upped their bid and is the current frontrunner. However, one has to wonder if there is enough value in the World Poker Tour to be worth the price it is commanding.
Bally’s Make a Monster Bid for World Poker Tour
If you have been following along with the most recent sale of the World Poker Tour, you know that Element Partners put in a bid in January for $78.25 million. They are looking to purchase Club Services, the parent company for the World Poker Tour. Club Services is owned by Allied Esports Entertainment.
Everything appeared on track for a transition to Element, and then Bally’s stepped in with its own big. Bally’s threw down an offer for $105 million, and Allied’s board immediately pegged that as the superior bid. However, they left the door open for Element to up its offer.
Back and Forth They Go: Bidding War Continues for World Poker Tour https://t.co/cyhqDrVxV6
— Poker News Daily (@pokernewsdaily) March 31, 2021
Element then stepped up their game and matched Bally’s offer. They are now offering $105 million to purchase all of the stocks related to Allied’s poker business.. Allied’s Board of Directors looked over the new proposal and determined that Bally’s is no longer the superior proposal. They are now moving forward to close on the Element deal by the end of April 2021.
No mention was made as to whether Bally’s will submit a new offer for the World Poker Tour. However, it is becoming increasingly unlikely that Bally’s will put in a new bid. They have a history of trying to buy companies at a discount. The World Poker Tour isn’t perceived as being worth much more than the $105 million purchase price. As such, it wouldn’t make sense for Bally’s to up their offer.
With that said, one has to wonder whether Element’s investment in the WPT is a wise one, especially considering the continued global pandemic.
Is the World Poker Tour Overpriced?
When Element put in their initial bid of $78.25 million, that seemed like a reasonable price for the World Poker Tour. The company has steadily grown over the last two decades to be one of the Big 2 poker tournament promotions in the world. At $78.25 million, there was a lot of room to continue growing the company and later selling the company for a substantial profit.
At $105 million, I am not so certain that the WPT will be the best buy in the future. Business will certainly be impacted over the next couple of years as most if not all live events will be either canceled or severely restricted. While some final tables are being played out after a year’s hiatus, there’s little guarantee that the company will be able to go full steam ahead in 2021 or even 2022.
Up Next for the World Poker Tour: A Trip to Sunny South Florida https://t.co/S31hLSdfbB
— Dynafive (@dynafive) March 29, 2021
This means that the company will have to focus its attention to online poker. While the World Series of Poker has been able to thrive online, it is hard to see the WPT able to pull off the same stunt long-term. After all, a WPT title does not hold the same prestige as a WSOP bracelet (even with the oversaturation of bracelets.)
Unless Element can come up with some unique ways to force major growth in the company, this deal could prove to be a long-term losing proposition. We could see Element forced to sell the company to the next owner for under $100 million. We’d love to be proven wrong, but a lot has to happen to get there.