New Poker Hand Dealt to Travel

Jan 30, 2006  •  Post A Comment

After a year and a half of increasingly contentious negotiations that resulted in a lawsuit between a cable network and the creator of its most popular series, the Travel Channel has finalized a deal for World Poker Tour’s sought-after spinoff “Professional Poker Tour.”

The lawsuit kept the show from airing, even though it finished shooting last May. It will now debut in June, when the upcoming fourth season of “World Poker Tour” concludes, and like “World Poker Tour,” it will run Wednesdays. The new deal includes a one-year agreement for the Travel Channel to show 24 two-hour episodes. Combined, the two series will make Travel the only cable network to have nearly year-round original poker programming.

The major difference between “World Poker Tour” and “Professional Poker Tour” is that the former is open to any player willing to pay the stiff entry fee, while the latter is made up of previous “World Poker Tour” winners.

“It allows the sport to exist in a whole new way,” said Steven Lipscomb, president and CEO of WPT Enterprises. “If you win a World Poker Tour event, you now win your way into the poker equivalent of the PGA, get enough exposure to become a television star and a three-year free roll into the professional poker player lifestyle.”

WPT Enterprises first announced the “Professional Poker Tour” in July 2004 as a potential companion to Travel’s top-rated “World Poker Tour.” Confident in his ability to find a network home for the series, Mr. Lipscomb shot the show in tandem with the globetrotting “World Poker Tour” during its 2004 season, holding a “Professional Poker Tour” tournament with popular pros at several “World Poker Tour” stops. But negotiations with Travel Channel dragged on, with both parties having very different expectations.

On one hand, “World Poker Tour” helped put the Travel Channel on the ratings map and takes credit for launching the cable poker phenomena in 2003, when it introduced the domestic use of in-table cameras. On the other hand, Travel Channel took a two-hour prime-time chance on “World Poker Tour” when every other network thought televised poker was a losing hand. The network is accustomed to production companies vying for projects rather than dictating terms-after all, producers for shows such as “The World’s Best Beaches” cannot typically put network executives over a barrel.

Travel also considered “World Poker Tour’s” original deal quite lucrative, since it allowed Mr. Lipscomb to retain “World Poker Tour’s” licensing-which the production company has used to sell and promote everything from “World Poker Tour”-branded poker chips to a gaming Web site.

“We don’t do things like most production companies,” Mr. Lipscomb said. “We are in the envious position of not being forced to make bad deals. So the reason it took a long time to make a deal on this show is we don’t need to make a bad one.”

By May 2005 Mr. Lipscomb’s company had shot the first season of the new poker series, but “Professional Poker Tour” still lacked a home. Plans to shoot a second “Professional Poker Tour” season were put on hold until a deal could be reached, and “World Poker Tour” informed Travel Channel it was shopping the new series to other networks.

Then, last September, cable’s 800-pound gorilla waded in: ESPN offered WPT Enterprises a guaranteed three-year deal to air 48 hours of “Professional Poker Tour” per season.

It was a dream offer, and WPT Enterprise executives were thrilled. But Travel Channel responded to the bid by threatening ESPN with legal action, arguing that Discovery Networks had ownership of any “World Poker Tour” spinoff. ESPN quickly rescinded its offer, and Mr. Lipscomb sued Travel Channel and Discovery Networks for breach of contract.

At issue was whether a clause in the “World Poker Tour” contract stating that Travel Channel owns “World Poker Tour” “elements” referred to outtakes and other footage or to a spinoff series. Throughout, both parties contend the relationship remained amicable. Strained, perhaps, but amicable. “It sounds awkward, but it hasn’t been,” said Patrick Younge, Travel Channel’s executive VP and general manager. “We’ve been working very successfully together on the fourth ‘World Poker Tour’ season.”

Going into the fourth quarter, the parties were under mounting pressure to resolve the issue. WPT Enterprises is public company that has yet to turn a profit.

Last week Travel and WPT Enterprises reached an agreement that sources said is similar to the original deal for “World Poker Tour.” “The deal allows for flexibility for us to continue building our business, which is what matters to us,” Mr. Lipscomb said.

Mr. Lipscomb predicted the deal will allow WPT Enterprises to achieve profitability this year.

“We would have been profitable last year if the ‘Professional Poker Tour’ had not been in dispute,” he said. “What we’ve done is remarkable in a very short amount of time. The monetization of the brand is really beginning to work.”

While the lawsuit was still pending, WPT Enterprises’ relationship with Discovery was certainly challenging. Mr. Lipscomb said, “It’s like being in the middle of a relationship that is struggling, but you both know you have a kid. But to the credit of both organizations, we never did anything that did damage to the kid-the ‘World Poker Tour’-and genuinely tried to figure things out. We’ve done that, and now we’re in the ‘make-up sex’ phase.”

“Every marriage has its tiffs, but now we’re back together,” said Travel Channel’s Mr. Younge. “We’ve always said Wednesday night is poker night, but now we can say Wednesday night is poker premiere night.”