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There have been big winds of change in the global gaming industry in recent years, with the undertone set by brand acquisitions and mergers. And, when you marry the capital and resources of a leading, publicly traded company with the business model and expertise of a global leader in live poker tournaments and televised media, you get an unbeatable combination, one that can bring a revolution in the video gaming and e-sports industry. Such seems the idea behind the latest, and one of the most pivotal acquisitions this year.
Leading poker, televised gaming and entertainment provider, World Poker Tour (WPT) is about to undergo yet another change of ownership. While the first acquisition of the global brand happened in 2015 when Hong-Kong listed Asian gaming major, Ourgame International Holdings Ltd. took control of the brand, it`s now Black Ridge Acquisition Corp. that has lapped up the popular brand from Ourgame. Not just that, Black Ridge, the Special Purpose Acquisition Company (SPAC) headed by three-time World Series of Poker (WSOP) bracelet winner Lyle Berman, has agreed to buy another brand, Allied Esports International Inc. from Ourgame.
The two brands – WPT and Allied Esports will be merged and come together as Allied Esports Entertainment Inc that will have an initial enterprise value of $214 Million, with a trading presence on NASDAQ as AESE.
The purchase deal of the two entities is reported to cost Black Ridge a sum of $150 Million and is expected to be formally inked in the first quarter of 2019. As part of the agreement, Black Ridge will issue $118 million in shares to Ourgame and $35 million in cash.
If an approximate 40 Million people across the globe are playing online poker as of date, then the estimated number of video gamers is 2.2 Billion. Global esports contests override these figures by far, with 380 Million viewers of global esports contests. This makes esports a much bigger market, with a much better growth ratio.
By acquiring and merging WPT and Allied Esports, Black Ridge, that has no assets of its own but expertise in raising money to fund a future purchase, will be making a definitive entry into the arena of esports. Black Ridge aims to apply WPT’s robust event and media distribution model to dig into competitive video gaming.
“There’s a gap in monetization in esports right now. It’s a big buzzword, but the main way companies and investors are approaching esports is by investing in the game publishers or acquiring the teams that compete. We see an opportunity to monetize the viewership right now,” explained Chairman of Black Ridge, Ken DeCubellis, who will take on the reins of the Chief Finance Officer of AESE.
Allied Esports International enjoys a global network of esports properties and facilities for content production including the popular HyperX Esports Arena Las Vegas in Nevada.
WPT, on the other hand, has grown from strength to strength in terms of content distribution, customer engagement and its deep-rooted grip on planning and organizing live events.
The merged entity i.e. AESE will leverage WPT’s expertise in these areas, and combine them with Allied’s network of properties and facilities.It will primarily focus on providing in-person experiences, and interactive services in video gaming and poker, catering to a 2.2 Billion strong audience.
The ultimate mission for AESE will be to deliver unparalleled experiences for a global esports audience and create original content for distribution across digital, traditional and social media platforms.
Alongside, AESE will operate venues, sell the content generated by the events, and in the future migrate its viewers to an ambitious and new proprietary online tournament platform that is slated for a 2010 launch.
A renowned name in hosting land and online tournaments, WPT has charted a success story in growth and expansion through the past decade. In 2009, the brand was purchased by Bwin Party Digital Entertainment for $12.3 Million. I
WPT`s business equation with Ourgame began as early as December 2014, when the two parties announced an alliance coming together to license products on an exclusive basis in more than a dozen countries across Asia. Following this, in June 2015, Ourgame purchased WPT for $35 Million in cash, on a debt-free basis. At this point, WPT had grown into 70 WPT Main Tour, WPT Alpha8TM, WPT National and WPT DeepStacks events.
WPT has been upping the ante as far as organizing live poker tournaments is concerned. Apart from its busy roster of global events, the brand made a decided Asia swing, by adding Vietnam to its roster. The brand returned to India for the second edition of the hugely popular WPT India, in addition to announcing a multi-year partnership with Zynga Inc., for introducing WPT-themed tournaments on the Zynga Poker platform.
Is WPT getting disbanded and overtaken by a completely new team of experts? No. Rather, it is transitioning into an evolved form that will apply its expertise in the esports industry, without affecting its own poker operations.
Director of Black Ridge, Lyle Berman will take over AESE as Chairman. “In more than 40 years in the gaming and entertainment business, this is the most exciting opportunity I have seen. The capital from the Black Ridge SPAC will be used to expand AESE’s global property network, accelerating their first-mover advantage as the company continues to build a brand that is synonymous with esports,” Berman said.
Ourgame CEO Frank Ng will assume the same role in this newly merged enterprise. Ng will find the support of many members in the Ourgame team.
“This transaction will be transformational for our rapidly expanding company and provide the esports community with a fully capitalized, globally connected esports enterprise capable of producing the volume and breadth of esports entertainment products the industry is increasingly demanding,” Ng said.
He added, “By applying WPT’s proven business model to the much bigger, higher-growth global esports business, we are creating an esports entertainment platform that is long-lasting and positioned to capture the esports monetization opportunity.”
Eric Yang will be Vice Chairman, David Moon will remain the Chief Operations Officer and Adam Pliska will take on the role of the company President.
While WPT, as part of the new business entity will be one of the biggest poker brands to enter esports, it is certainly not the first.
Malta-based Mediarex Sports & Entertainment that was founded by Alex Dreyfus to ‘sportify’ poker via the Global Poker Index (GPI) and the Hendon Mob (player and event results database) ventured into esports with its new enterprise, ChiliZ in April, 2018.
Chiliz works to connect fans to players and teams in popular leagues and tournaments. In December 2017, Mediarex announced a partnership with Kwan Entertainment to launch the Global Poker League (GPL) in India.
With the WPT-Allied Esports merger yet to reach completion, there is a lot of expectations riding on this venture.