Jackpot!
Published May 2005
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COMMENT ON THIS ARTICLEFirst, he needed collaborators. He signed on two friends, Robyn Moder, who had overseen production on America's Most Wanted and Cops, and Audrey Kania, who had launched new divisions for Disney's Consumer Products Group. Selling licensed merchandise was a big part of his WPT plan, and Lipscomb knew that few were better at it than Mickey and company.
As he proceeded, Lipscomb followed the model of golf's PGA Tour. In golf, there are no teams or owners, just individual players who enter tournaments as they see fit and pay their own way. The prizes they compete for come mainly from sponsors, not the league itself. International events and players move in and out of the mix, and satellite tournaments have been developed in every corner of the globe.
"I created the only sports league in America where you can come out and play."
But Lipscomb set out to offer something even the PGA couldn't match: "I created the only sports league in America where you can come out and play. If you could sell spots for people to suit up and play in the NBA finals for, say, $25,000, lots of people would do it. But you can't. Here, you can pay your money and compete with the best players in the world. And you can win." Anyone with $10,000 or so can buy into a World Poker Tour event, and hundreds of people have been doing just that. Lipscomb's WPT has the largest prize pool -- $70 million to $90 million, this year -- of any sports league in North America and regularly creates one or two millionaires a month.
Early on, few shared the vision. From his television production days, Lipscomb knew executives at many networks and cable stations, but when he called, they laughed. Given the limited success of televised poker to that point, no one else thought the airwaves needed even more poker. Its seedy backroom image made it difficult to interest television, potential employees, sponsors, and later, investment bankers. Some potential hires visiting the firm's temporary office in Los Angeles wondered if the enterprise was closer to porn than to mainstream entertainment.
But Lipscomb was convinced that, as with Battle for the Minds, he just needed to show people his product. He decided to raise enough money to produce the show before it had been sold to television. His first call was to Lyle Berman, founder of Lakes Entertainment, a company that consults with Native American tribes in developing casino gaming. An avid poker player, Berman was one of many subjects Lipscomb had met while making his poker documentary. Berman got it right away. The Lakes Entertainment board approved a $3.5 million investment in December 2001, and the World Poker Tour was in business the following February, just five months after Lipscomb started writing his business plan. He sold 70% of his concept to Lakes, kept 16.5% for himself, and divvied up the rest to top management and others. To get the WPT off the ground, he gave up a lot, but he put in no money himself. "I'm a sweat equity guy," he says.
Lipscomb, Kania, Moder, and an assistant moved into four offices on a former Warner Brothers production lot in West Hollywood. The historic building had been converted to offices and was chosen for its flexible floor plan, which allowed tenants to expand as needed. In three years, the WPT has hired 57 full-time employees and now occupies almost the entire building. It has working sound stages -- and, says Kania, "celebrities playing basketball just outside."
The first thing Lipscomb did after securing his venture capital was to hit the road and persuade high-profile casinos to get involved. The events that are now part of the WPT already existed, as discrete tournaments, waiting to be pulled together under an umbrella. In the world of big-time tournament poker, the majors have long been the $10,000-entry No Limit Texas Hold 'em tournaments. One such event was the World Poker Finals at Foxwoods in Connecticut.
When Lipscomb and Kania showed up at Foxwoods in March 2002 to make their pitch, they were shocked to find the casino executives, from the boss through middle management, in suits and ties, seated around a huge conference table. "All we had brought was a flip chart," Lipscomb recalls. The audience seemed unreceptive to the pitch, but less than 20 minutes after Lipscomb finished, his cell phone rang. It was the casino's poker-room manager, Kathy Raymond, calling to sign on. Lipscomb says Kania still kids him about how big his smile grew as he took the call. They had a deal, and now Lipscomb had the leverage to get other venues -- the Bellagio, Commerce -- on board. "I signed them up within a month," he says, "and by the beginning of April, we had a tour."
