The folks at Allied Esports Entertainment seem exhausted by the effort of divesting their company of the World Poker Tour. But they have finally managed it.
Yesterday the company completed the sale of its 100% stake in Club Services Inc to Element Partners LLC. Club Services is the subsidiary of Allied that holds the WPT and any related intellectual property, along with any other poker assets in the AESE structure.
The final price was $105 million.
Despite only passing yesterday, the sale is back-dated to July 1, 2021.
AESE announced the sale in a brusque press release. The tone of the release seems to reflect a kind of corporate fatigue. Once you hack out the small print from the bottom, the entire presser was about 160 words long, with just a single quote.
"This is a momentous day for AESE and an opportunity to focus on growing the business in exciting and innovative ways," Frank Ng, CEO of Allied Esports Entertainment, said. "Congratulations to Adam Pliska and his entire team at World Poker Tour as they too move into a new, successful chapter."
The sales process took almost six months, spanned two seasons of the WPT, and involved an attempted shareholder's coup half the world away. Even Allied's marketing team can't get worked up about this anymore.
Neither the WPT, Pliska, or Element have made any announcement on their social media so far.
A sale of this magnitude should be a celebration, even if only for public relations purposes. Instead, the announcement reads more like a managerial letter to an admin assistant who quit.
Sales in need of assistance
Watching the whole process over the last few months has been a fascinating reminder of the byzantine flow of ownership of the casino industry. Not only because of the internecine struggles of the multi-layered corporate structure above the WPT, but in the complexity of the multi-layered structures that were in competition for the sale.
The sale was first announced in January, 2021. The price listed was $78 million. The buyer was Element.
Adam Pliska was rolled out to do a video announcement and the poker world got excited. The pandemic turned out to be a real period of shake-ups in the poker landscape. In the realm of television alone, the WSOP quit ESPN to go back to its ex, CBS Sports. But where the CBS/WSOP deal passed cleanly, Allied was back on the horn a little later saying that the rules of the game had changed.
Element was out in the cold. Bally's Corp had outbid them.
Not to be outdone, Element came back and counter-bid. Now it was Bally's turn to feel the sting of rejection. Realizing that this was not a done deal, Allied went quiet and took to the back rooms. What followed was a period of bidding in the dark.
When the parties finally emerged again several months later, AESE announced they were going with Element after all.
Overseas overseers
However, when it came time to sign checks and contracts, another problem came up.
A large block of AESE's shares belong to a company called Ourgame International Holdings Limited. Ourgame floats on the Hong Kong stock exchange. HKSE rules dictated that before Ourgame could cast its votes, it too needed a shareholders meeting. An actual vote on a vote.
There were more delays while the relevant shareholder's meetings were set up.
These meetings, in turn, produced their own drama, as Ourgame's shareholders were split over the decision. A coup was launched and failed, the votes were finally cast, and Ourgame came out in favor of the sale of Club Services.
This meant that Allied was in favor too. The resolution passed, and here endeth the saga.
What does this sale mean for the WPT?
The deal was summed up by Allied like this: "Following the completion of the WPT Business transaction, [Allied Esports Entertainment] is comprised of its esports business, Allied Esports, and cash resources from the sale."
The WPT's position is less clear than Allied's. Pliska is staying on as CEO, so we can expect a certain amount of continuity. But during the pandemic, the WPT experimented with a string of spin-offs in South and East Asia especially. Element may want to revisit those experiments as a way to expand the brand.
Although Element will want to put its stamp on the WPT, the main business of the WPT has always been and will no doubt continue to be the main tour. The current series is already scheduled until the end of the year. However, the mid-season break may offer a chance for a shakeup.
Whatever happens, Element ended up paying an extra $27 million over its original bid for the new toy. The folks at Element are going to want to play with it. Expect changes and announcements galore soon.
Featured image source: Flickr by WPT
