July 28th, 2011
TV Poker Finds New Outlet
The Wall Street Journal
Federated Sports & Gaming Inc., a start-up that promotes poker-related businesses, is betting there’s money to be made in televised poker even as a government crackdown of online poker has forced several TV networks to stop airing poker tournaments.
On Wednesday, Federated is expected to announce a deal to televise its new “Epic Poker League” tournament on CBS Corp.’s namesake network as well as on Velocity, a new network being started by Discovery Communications Inc., according the company.
According to a person familiar with the plans, Epic is paying CBS to air the show on weekends as part of a “time buy,” a deal similar to an infomercial in which the company pays the network to air the show. On Velocity the program will air as a “promotional barter,” in which the poker company supplies the show without payment from the channel, another person familiar with that deal said.
Bob Scanlon, the senior vice president of Velocity, said Epic “is a natural fit for Velocity and the upscale male audience that we’re courting.”
The time-buy model has become nearly standard for poker shows on television. Until recently poker websites Full Tilt Poker and PokerStars paid television networks for the rights to broadcast poker shows that featured their brands.
But those heavy funders disappeared in April following indictments of executives at the Full Tilt and PokerStars on charges of bank fraud and money laundering. The charges were part of a federal government attempt to curtail online poker, which it contends is illegal in the U.S. The government’s actions have forced the online operators to pull their funding of TV shows, which were canceled by networks.
Full Tilt and PokerStars deny the government’s charges and maintain that poker isn’t illegal under federal laws.
Founded in 2010 and based in Los Angeles, Federated promotes poker across a range of outlets including TV, tournaments and online games. The company counts venture capitalist J.B. Pritzker as an investor.
Jeffrey Pollack, chief executive of Federated, said he couldn’t comment on the terms of the deal with CBS, which will air seven hours of the tournament, nor Discovery, whose Velocity network will air 13 hours, along with re-airs of the CBS episodes. The airdates will be announced later in the summer.
Mr. Pollack said he hopes the television branding will help spur revenue in other businesses, including an amateur poker league and a social media game that the company plans on starting.
He said his company believes there is still a large untapped market in consumer brands that would like to advertise to the young males that watch poker shows. He set up the “Epic Poker League” with that in mind, he said, and he expects media companies will pay more to license shows as poker tournaments mature.
Unlike many other poker tournaments, Epic is allowing only a stable of top poker professionals to compete for top prizes in four main events.
“We are confident that we are going to be able to also attract mainstream consumer products to our brand,” Mr. Pollack said.
A few other poker shows, including the World Series of Poker on ESPN, have found success in attracting non-poker sponsors such as Jack Links Beef Jerky and GoDaddy.com. However, even ESPN had lucrative ad deals with poker companies, including one worth between $20 and $30 million a year from PokerStars, according to people familiar with the matter.