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Hypothetically what if ESPN cut WSOP coverage back to pre-2003 levels? Hypothetically what if ESPN cut WSOP coverage back to pre-2003 levels?

05-07-2008 , 12:26 PM
With all the threats of 'gloom and doom' over diminishing poker TV viewership, what do we think would really happen if ESPN just decided to focus it's all seeing eye somewhere else and when back to a couple hours coverage of the ME and nothing else? Would the WSOP close up shop? Would the sky actually fall?

All serious opinions welcome.
Hypothetically what if ESPN cut WSOP coverage back to pre-2003 levels? Quote
05-07-2008 , 12:32 PM
Quote:
Originally Posted by ZPinhead
With all the threats of 'gloom and doom' over diminishing poker TV viewership, what do we think would really happen if ESPN just decided to focus it's all seeing eye somewhere else and when back to a couple hours coverage of the ME and nothing else? Would the WSOP close up shop? Would the sky actually fall?

All serious opinions welcome.

If ESPN were to walk away from the WSOP after 2008, I expect the owners of Caesars Entertainment, private equity firms Apollo Management and Texas Pacific Group (TPG), to sell the WSOP intellectual property and relieve the entire existing WSOP organization of their employment.

The likely buyer of the WSOP, in my opinion, would be a group that would want to use the WSOP to target Europe-based poker players, especially online poker players, to the group's vacation resort property.

I would not be surprised if a group from the United Arab Emirates, namely Dubai or Abu Dhabi, will buy the WSOP from Caesars and move it to the UAE in time for 2009 if ESPN were to walk away after 2008.

2009 WSOP in Dubai in November-December? The idea may sound preposterous if you are based in Las Vegas or Southern California, but it isn't that far-fetched a notion if you start to thinking about the idea and talking to people in the industry to see what they know and what they are thinking.

Last edited by olivert; 05-07-2008 at 12:47 PM.
Hypothetically what if ESPN cut WSOP coverage back to pre-2003 levels? Quote
05-07-2008 , 12:34 PM
And where would this be tournament in Dubai be held? Isn't gambling illegal in the UAE?
Hypothetically what if ESPN cut WSOP coverage back to pre-2003 levels? Quote
05-07-2008 , 12:38 PM
Where is Dubai? lol
Hypothetically what if ESPN cut WSOP coverage back to pre-2003 levels? Quote
05-07-2008 , 01:29 PM
Quote:
Originally Posted by Kevmath
And where would this be tournament in Dubai be held? Isn't gambling illegal in the UAE?
Locals who are of the Muslim faith are not allowed to gamble in Dubai.

Dubai has a man-made island offshore with a 5-star hotel/convention center complex, the Burj Al-Arab, which is connected by a causeway to the mainland.

http://www.metacafe.com/watch/46352/dubai_palm_island/

http://travel.howstuffworks.com/dubai.htm

This "offshore" facility can potentially be used for the WSOP provided that the company involved can obtain a temporary poker tournament permit (for a foreigner-ONLY poker tournament, much like the way the Sheraton Walker Hill Casino in Seoul, Republic of Korea is licensed for "foreigner-only" poker tournaments) and pay local taxes.

Recall that gambling is not permitted in Brazil either, but PokerStars.net was able to obtain a temporary poker tournament permit to hold the LAPT inaugural event this past weekend and the Brazilian government withheld 30% of the prize pool for taxes.

Last edited by olivert; 05-07-2008 at 01:53 PM.
Hypothetically what if ESPN cut WSOP coverage back to pre-2003 levels? Quote
05-07-2008 , 01:39 PM
Understand I did not say "ESPN walks away" I said that they more or less went back to the same type of coverage pre-Moneymaker.

Are you really saying that the WSOP is a victim of it's own success? Here we are (as of last year) still seeing a huge turnout for the WSOP overall and somehow we're at a crossroads where if ESPN can't make poker on TV a hit again, that it's time to cut and run (and ship the WSOP brand off to the UAE)?? Is Gordon Gekko involved in this deal somehow?
Hypothetically what if ESPN cut WSOP coverage back to pre-2003 levels? Quote
05-07-2008 , 01:58 PM
30% of the prize pool for taxes lol
i wanna be an elected official
Hypothetically what if ESPN cut WSOP coverage back to pre-2003 levels? Quote
05-07-2008 , 02:09 PM
Quote:
Originally Posted by AlanDyer
30% of the prize pool for taxes lol
i wanna be an elected official
Don't laugh at the 30% tax on the prize pool imposed by Brazil for poker tournaments. PokerStars.net certainly didn't, as it ended up having to charge ZERO entry fees for the LAPT Brazil event.

Singapore allegedly wants to withhold 35% of the prize pool for taxes. That's the reason why BetFair bailed out of the Asian Poker Tour Singapore event after 2006.

Argentina allegedly wants to withhold a whopping 40% of the prize pool for taxes. That's the reason why PokerStar.net LAPT skipped Argentina during Season 1.

Macau Special Administrative Region (of the People's Republic of China) imposes a 5% stamp tax on poker tournament prize pools. The PokerStars.net APPT ended up paying the 5% stamp tax in 2007 rather than making the players pay the tax.

Last edited by olivert; 05-07-2008 at 02:38 PM.
Hypothetically what if ESPN cut WSOP coverage back to pre-2003 levels? Quote
05-07-2008 , 02:15 PM
Quote:
Originally Posted by ZPinhead
Understand I did not say "ESPN walks away" I said that they more or less went back to the same type of coverage pre-Moneymaker.

Are you really saying that the WSOP is a victim of it's own success? Here we are (as of last year) still seeing a huge turnout for the WSOP overall and somehow we're at a crossroads where if ESPN can't make poker on TV a hit again, that it's time to cut and run (and ship the WSOP brand off to the UAE)?? Is Gordon Gekko involved in this deal somehow?
WSOP TV ratings peaked in 2004.

One can't expect ESPN to keep paying a big rights fee if ratings continue to slide year after year to the point where not enough viewers in the 18-34 demographic will tune in to attract sponsors and resulting in serious damage in ESPN's overall viewer demographic profile.

ESPN can and will do what is necessary to keep its prime time viewership demographics as young as possible (i.e. median age in the 30s)

If enough young viewers have stopped watching poker to the point where the median viewer becomes too old, then ESPN will not hesitate to walk away from the WSOP.

(ESPN walked away from the Trump Taj Mahal US Poker Championship with 2 years left on that contract.)

Recall that ESPN2 had a viewer median age problem (median age crept up to 44) a few years ago and ESPN, Inc. had to do something to try to fix the problem. The first attempt at fixing ESPN2, with ESPN Hollywood and Quite Frankly with Stephen A. Smith, ultimately didn't work.

Last edited by olivert; 05-07-2008 at 02:36 PM.
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05-07-2008 , 02:51 PM
If ESPN decided it didn't want to cover the WSOP for more than 1 episode, why wouldn't the WSOP just shop around for another cable network to cover it. I'm GSN, for example, would rather show the WSOP than the WPT.

I'm not surprised that poker gets very marginal ratings for a major network or an ESPN primetime broadcast. What I am surprised about is that poker has not found a stable home on a minor cable network. I mean, I get an entire tennis channel....can the poker niche be any smaller than the tennis niche?
Hypothetically what if ESPN cut WSOP coverage back to pre-2003 levels? Quote
05-07-2008 , 03:27 PM
Quote:
Originally Posted by NickMPK
If ESPN decided it didn't want to cover the WSOP for more than 1 episode, why wouldn't the WSOP just shop around for another cable network to cover it.
Because the other sports TV outfits (FOX Sports Net in particular) in the U.S. want to be paid to air poker on their channels in 2008, instead of the other way around.

Both ESPN and Caesars know that no one else besides ESPN would want to pay for the U.S. TV rights to the WSOP if the WSOP continues to lose young viewers, particularly in the 18-34 demographic.


Quote:
I'm GSN, for example, would rather show the WSOP than the WPT.
Any poker TV show that signs with GSN will be committing a form of suicide.

As we have seen with the WPT, GSN has a built-in demographic disadvantage, with an audience skew toward older females (median viewer is a lady in her 50s who plays bingo at church.)

WPT on GSN is not able to sell ads targeting typical "sports TV" viewers such as beer, soft drinks/energy drinks, mobile telephone services, sports cars and pickup trucks, and even online poker (PokerStars.net stopped paying to put logoes on players at WPT TV final tables after Reno on March 28 once WPT on GSN TV ratings became available for the premier week of March 24-30.)

Quote:
I'm not surprised that poker gets very marginal ratings for a major network or an ESPN primetime broadcast. What I am surprised about is that poker has not found a stable home on a minor cable network. I mean, I get an entire tennis channel....can the poker niche be any smaller than the tennis niche?
Yes. Very much so. NewsCorp killed the idea of an all-poker digital TV channel in the U.S. market in 2005. I was told by one source that Rupert Murdoch himself killed the idea.

Right now, poker on TV in the U.S. market has a bad reputation in the advertising agency/media planning community for 1) losing young viewers in the 18-34 demographic, and 2) not delivering enough value to non-poker-related advertisers.

Unless the 2008 WSOP November Main Event Final Table broadcast on ESPN were able to turn the tide against TV ratings erosion, the entire concept of poker, with the WSOP in particular, as a rights fee and non-poker-spocific product sponsorship-driven TV property in the U.S. market, could very well be dead and buried once and for all.

If there were to happen, the WSOP brand will inevitably have to be sold by Apollo/TPG to a company that can fully harness its value as a rights fee and non-poker-related product sponsorship-driven TV product in European markets. One way to do that is to hold the 2009 WSOP in Dubai at a "foreigner-only" hotel and convention facility.

Last edited by olivert; 05-07-2008 at 03:35 PM.
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05-07-2008 , 03:40 PM
How do the ratings of first-run WSOP episodes on ESPN compare to other ESPN prime-time weekday programs (e.g. regular season MLB or college basketball games)?
Hypothetically what if ESPN cut WSOP coverage back to pre-2003 levels? Quote
05-07-2008 , 03:46 PM
Quote:
Originally Posted by olivert
If there were to happen, the WSOP brand will inevitably have to be sold by Apollo/TPG to a company that can fully harness its value as a rights fee and non-poker-related product sponsorship-driven TV product in European markets. One way to do that is to hold the 2009 WSOP in Dubai at a "foreigner-only" hotel and convention facility.
Accept the only thing that they would be buying is the right to use the WSOP branding. No one in their right mind would think that it would be anything but a shadow of the traditional WSOP, would they? No North American donks are going to Dubai for a tournament and with as saturated as the $10k+ tournament circuit currently is why would more than a handful of 'pros' (probably paid/freerolled it to have known faces) participate? Especially with all the bad feelings about breaking tradition that this kind of a move would generate.
Hypothetically what if ESPN cut WSOP coverage back to pre-2003 levels? Quote
05-07-2008 , 03:53 PM
Quote:
Originally Posted by ZPinhead
Accept the only thing that they would be buying is the right to use the WSOP branding. No one in their right mind would think that it would be anything but a shadow of the traditional WSOP, would they? No North American donks are going to Dubai for a tournament and with as saturated as the $10k+ tournament circuit currently is why would more than a handful of 'pros' (probably paid/freerolled it to have known faces) participate? Especially with all the bad feelings about breaking tradition that this kind of a move would generate.
The WPT is downsizing its Season 7 schedule in 2008-2009 by over 30%, with only 14 scheduled televised tour stops instead of 20.

Also note that GSN has not picked up its option for WPT Season 7 yet (deadline for picking up the option is June 1, 2008)

==

In hindsight, the WSOP should have tried to "fix" the TV product in order to combat the TV ratings erosion problem a year ago. (One can say the same for WPT and NBC Heads-Up as well.)

By attempting a "fix" after the TV ratings erosion evidence for WPT and NBC Heads-Up became available to the advertising agency community, plenty of critics out there will view the WSOP's decision to move the 2008 WSOP Main Event final table to November as an act of desperation to save the WSOP as a TV rights fee-generating product in the U.S. market.

Last edited by olivert; 05-07-2008 at 04:01 PM.
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05-07-2008 , 05:00 PM
Well Olivert, I choose not to buy your theories (head in sand style) as with the picture that you've painted the WSOP as we know it (yearly donkament, held in NA) is basically doomed. Even if ESPN is able to prop up TV viewership in 2008, it's going to start sagging which you have indicated would spell the chopping block for the WSOP. I have to believe in a better world than that!

How can you have decades of tradition, thousands of people that come and pay to be in a tournament (no matter how much you screw it up), then just dump it because you can't get the TV revenue that you could 3 years ago?
Hypothetically what if ESPN cut WSOP coverage back to pre-2003 levels? Quote
05-07-2008 , 05:53 PM
Do you really think the old timer pros and top cash game player Millionares would let the WSOP be bought and taken out of the US?

I don't think so. They love the game and would see this is a complete travesty. I could see a group of them or a site like Full Tilt or Pokerstars just buying the WSOP brand themselves if Harrahs wants to sell it. Many pros seem to hate Harrahs and would probably be happy if they wanted to get rid of it.

I don't see any way the WSOP ever leaves the US and Las Vegas in particular no matter what happens with the TV contract situation.
Hypothetically what if ESPN cut WSOP coverage back to pre-2003 levels? Quote
05-07-2008 , 06:03 PM
Quote:
Originally Posted by olivert
If ESPN were to walk away from the WSOP after 2008, I expect the owners of Caesars Entertainment, private equity firms Apollo Management and Texas Pacific Group (TPG), to sell the WSOP intellectual property and relieve the entire existing WSOP organization of their employment.
To make this assumption wouldn't you have to have access to the WSOP's P and L statement? How do you know that the WSOP doesn't have a positive net margin excluding TV rights? Even without TV rights I have to believe the WSOP can be run profitably. Add in casino revenue, room, food & beverage.

Harrah's is in the business of attracting people to it's casinos.
Hypothetically what if ESPN cut WSOP coverage back to pre-2003 levels? Quote
05-07-2008 , 06:07 PM
Quote:
Originally Posted by PorkchopDJG
I don't see any way the WSOP ever leaves the US and Las Vegas in particular no matter what happens with the TV contract situation.
Neither do I. Granted I have no facts at all to back it up, but I would think the Rio would make enough on hosting the wsop alone to validate keeping the rights to it. Just the tournament fees and room purchases alone must be great for them.
Hypothetically what if ESPN cut WSOP coverage back to pre-2003 levels? Quote
05-07-2008 , 07:40 PM
Quote:
Originally Posted by ZPinhead
How can you have decades of tradition, thousands of people that come and pay to be in a tournament (no matter how much you screw it up), then just dump it because you can't get the TV revenue that you could 3 years ago?

Because Apollo Management and Texas Pacific Group (TPG) are private equity firms which bought Harrah's/Caesars Entertainment at the very TOP of the market.

Harrah's/Caesars is now worth only about half what Apollo and TPG paid for it. The junk bonds used to finance the purchase were NOT selling due to the ongoing credit crunch.

Apollo and TPG have no emotional attachment to the WSOP.

If the analysts at Apollo and TPG conclude that the WSOP cannot ever be profitable because it no longer has any value as a TV rights fee generating property in the U.S. market, I would not be surprised to see Apollo and TPG sell the WSOP intellectual property to some other entity.

I am suggesting that the "some other entity" could be based in the United Arab Emirates, particularly Dubai given Dubai's appetite in buying casino and gambling properties (the Dubai government now owns a big chunk of MGM Mirage.)

Dubai is building itself as a major financial and sports entertainment business center (home to hedge funds, sports event government bodies, and sports TV producers targeting Europe, the Middle East, and the Indian Subcontinent).

Dubai is also positioning itself as a warm-weather winter playground for wealthy Europeans.

Dubai now holds 2 international "friendly" soccer tournaments in January involving top European soccer clubs. (Manchester United, Bayern Munich, and Inter Milan, for example, played in Dubai in the past 2 years during January.)

Having the WSOP in Dubai during late Autumn or early Winter (i.e. November, December, or January) actually makes sense if you have a global perspective of poker, rather than a Las Vegas/Los Angeles-centric perspective.
Hypothetically what if ESPN cut WSOP coverage back to pre-2003 levels? Quote
05-07-2008 , 07:51 PM
If Caesars had a big enough building in the European Union, then we wouldn't be having this discussion as the WSOP would have been moved to Europe by now.

The problem: Caesars Castilla-La Mancha in Spain will NOT open for business until 2011, by which time one would expect TV ratings for poker in Spain, Germany, and Italy to be way past peak (young viewers in the U.K. have already begun to tune out.)

Apollo and TPG cannot afford to wait if they were to decide to sell the WSOP after 2008 (because the ratings erosion problem could not be stopped, resulting in ESPN cancelling the rights fee TV contract.)

Because there isn't a big enough building in Europe with a poker tournament permit, Dubai would be a potential alternative.
Hypothetically what if ESPN cut WSOP coverage back to pre-2003 levels? Quote
05-07-2008 , 08:24 PM
Quote:
Originally Posted by olivert
If the analysts at Apollo and TPG conclude that the WSOP cannot ever be profitable because it no longer has any value as a TV rights fee generating property in the U.S. market, I would not be surprised to see Apollo and TPG sell the WSOP intellectual property to some other entity.
Why does it keep coming back to value as a TV rights fee generating engine? Is this really where all of the meat is in the WSOP (as far as the IP owners are concerned)? It seems that there is quite a bit more cash flowing through this, maybe just not what it was at the peak. It is just a series of poker tournaments, after all. There's entry fees, accommodations, F&B, ancillary gaming income, etc. Has this all just been fluff in the face of TV rights fees?
Hypothetically what if ESPN cut WSOP coverage back to pre-2003 levels? Quote
05-07-2008 , 08:35 PM
In your opinion Oliver, how much do the ratings have to improve for the WSOP to stay in Vegas (and not move to Dubai like you claim will happen).
Hypothetically what if ESPN cut WSOP coverage back to pre-2003 levels? Quote
05-07-2008 , 08:50 PM
Isn't there any concern that moving the WSOP out of Vegas could result in a backlash (or at least lack of interest) by the current fan base that kills the long-term viability of the brand? It seems pretty short sighted, especially since TV viewership levels are so fleeting. If they would have moved to Europe already if they could have, and interest has already peaked and is declining there, what would they have done then? Move to the UAE a year or two later, followed by somewhere in Asia a year or two after that? It becomes a farce at some point.
Hypothetically what if ESPN cut WSOP coverage back to pre-2003 levels? Quote
05-07-2008 , 08:50 PM
Quote:
Originally Posted by ZPinhead
Why does it keep coming back to value as a TV rights fee generating engine? Is this really where all of the meat is in the WSOP (as far as the IP owners are concerned)? It seems that there is quite a bit more cash flowing through this, maybe just not what it was at the peak. It is just a series of poker tournaments, after all. There's entry fees, accommodations, F&B, ancillary gaming income, etc. Has this all just been fluff in the face of TV rights fees?
The WSOP as a standalone tournament poker business is simply NOT profitable without a substantial TV rights fee in the U.S. market given that product sponsorship revenue remains small.

The overhead required to operate the WSOP tournaments will eat up all the entry fees, and then some.

With the November Main Event final table, the overhead has gone up substantially. The set-up cost for the TV arena has doubled.

Given that the November WSOP Main Event final table is now a legitimate major security risk (i.e. potential acts of violence or terrorism, either by individuals or groups seeking to make a statement in front of TV cameras) because of all the controversy, the WSOP organizers will likely have to budget for additional security (i.e. involvement by local, state, and Federal law enforcement officials) to prevent sabotage.

==

Cliff notes:

WSOP with no TV rights fee = unprofitable

WSOP with no U.S. TV rights fee = sell WSOP to another entity with European focus
Hypothetically what if ESPN cut WSOP coverage back to pre-2003 levels? Quote
05-07-2008 , 08:56 PM
Quote:
Originally Posted by olivert
If Caesars had a big enough building in the European Union, then we wouldn't be having this discussion as the WSOP would have been moved to Europe by now.

The problem: Caesars Castilla-La Mancha in Spain will NOT open for business until 2011, by which time one would expect TV ratings for poker in Spain, Germany, and Italy to be way past peak (young viewers in the U.K. have already begun to tune out.)

Apollo and TPG cannot afford to wait if they were to decide to sell the WSOP after 2008 (because the ratings erosion problem could not be stopped, resulting in ESPN cancelling the rights fee TV contract.)

Because there isn't a big enough building in Europe with a poker tournament permit, Dubai would be a potential alternative.
There's no way the event will ever be moved to Europe...since they're aren't gonna opt out after 2008....this is all speculation on your part.

Please show the actual, detailed $$$ info (not your speculation, but from printed articles about money spent to enter tourneys and other related press releases showing total income) from last year's 2007 WSOP including sponsorships, clothing, playing cards, video games, related hotel income based on business at all Harrah's properties during WSOP, and everything other thing I can't think of. Not saying the $10 million from ESPN isn't important, but it's not the deciding factor...

Like I've mentioned before...if Harrah's waves goodbye, I assure that plenty of potential owners will line up for the event and will look to secure the event's future here in the U.S., especially for something that's gone on for 40 years...it won't be thrown away like a monthly Burger King promotion.

I'll add this as well...there's another problem with most ad agencies. Most of them are unwilling to change and think that the 1970's style of thinking works in 2008 about buys, promotions, etc. It's easy to see which ones continue to gain clients and increase thier revenue while others simply die.
Hypothetically what if ESPN cut WSOP coverage back to pre-2003 levels? Quote

      
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