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Allied Esports poker assets generate $1.5m profit ahead of Element sale


Allied Esports has reported a $45.5m loss for 2020, though its poker assets such as the World Poker Tour, which it is in the process of divesting, brought in a $1.5m profit.

Allied’s revenue from continuing operations – which excludes the poker assets – came to $3.2m, down 57.5%, over the 12 months to 31 December 2020

The business made $3.0m from in-person content, its main revenue stream, in 2020, down 60.0% compared to 2019, after live events were halted by the novel coronavirus (Covid-19) pandemic. 

Multiplatform content, on the other hand, saw revenue grow significantly, albeit from a low base. A 344.4% year-on-year rise took the multiplatform revenue for the year to $222,400.

Allied’s expenses, however, were much higher than revenue, growing 62.6% to $35.6m.

Costs related to in-person content, before depreciation and amortisation, came to $2.8m, down 41.7%. For multi-platform content, content-related costs were $54,000.

General and administrative expenses rose 11.3% to $11.9m, the business’ largest single outgoing for the year. 

Allied paid a further $5.1m in stock-based compensation, $187,000 in online operating expenses and $260,000 in selling and marketing expenses.

Depreciation and amortisation costs were $3.6m and impairment of tangible and intangible assets combined to reach $11.7m.

This led to an operating loss of $32.4m.

After $14.1m in other costs, due to interest, currency exchange and the extinguishment of debts, Allied made a $46.5m loss from continuing operations, almost exactly three times the amount it lost in 2019.

After factoring in a $1.5m profit from discontinued expenses, which include the World Poker Tour, its net loss was $45.1m, up 170.0% from 2019.

Allied is poised to sell its poker related assets to privately-held investment vehicle Element Partners for $105m, following a bidding war with land-based operator Bally’s.

Element initially agreed to acquire the assets for a total consideration of $78.3m, before  Bally’s went on to submit a proposal to acquire the entire Allied business for $100m in cash, stock, or both. 

Though Allied then agreed terms on an increased offer from Element, which amended its deal to to pay $90.5m upfront for the WPT business and Allied’s other poker assets, Bally’s upped its bid again $105m in cash for just the poker-related assets, which Allied said was a “superior proposal” to the Element offer.

However, Element matched this bid, which prompted Allies to again accept the Element offer, which now is set to close this month.