How Much Money Do French Investors Need to Buy Full Tilt Poker?

It's going to take a lot of money to pull Full Tilt out of its current mess.

It’s well documented that the Entities Who Comprise Wicked Chops Poker are no math math math majors, but we typically can at least manage simple addition and to a lesser degree, subtraction.

With all of the information that’s come to light recently regarding Full Tilt Poker‘s financial situation–we decided to figure out how much money the (alleged) French investment team that (allegedly) includes Laurent Tapie needs to save buy the company.

After tallying the figures, the mathematical term for our estimated final number is an “assload.”

Or more specifically, around $750-800M.

Here’s why (recap a full summary of the Tilt civil amendment figures here):

  • As of March 31st, Tilt owed players around the world approximately $390M…but only had approximately $60M in bank accounts, leaving a short-fall of about $330M.
  • After April 15th, liabilities were still over $300M.
  • By June 12th, Tilt couldn’t survive a $5M run on the bank.
  • Considering they probably had some run on the bank already by Euro customers post-4/15, let’s put their total amount owed globally to players around $350M.
  • As we’ve written before, precedence matters to the DoJ. So if the unfortunately named Anurag Dikshit (pronounced Dick-shit) and PartyPoker paid out a total of $450M under no threat of indictment by the DoJ, it’s safe to assume that Tilt’s pay-off nut is in the same ballpark.
  • On top of that, there’s been a brain-drain of talent from Full Tilt, and some new employees, especially high-priced ones at the top, will need to be hired. A full-on communications assault should happen (via customer service, marketing, advertising, promotions, etc.) to regain the public’s confidence in the company. And you’re possibly looking at rebranding Tilt as well. That all costs money.

So there’s approximately $350M owed to players, a low-end $350-400M DoJ pay-off, and then an additional operational capital investment. That’s $750-800M out the door before you’d see a penny back in return. Ouch.

It’s reasonable to assume the French investors (who, as of Monday, are reportedly getting closer to a deal) try work out a payment arrangement with the DoJ. Whether or not that’s accepted would likely be based on negotiated conditions, including whether or not any seized assets by the Fed effectively count as a “down payment” on the total settlement. So potentially that $750-800M isn’t 100% needed up-front on Day 1, or could be reduced some based on what’s already be seized.

But then again–maybe not.

Considering that Full Tilt lost around 50% of its market on 4/15, and that consumer confidence in Europe will erode some more of its base–hopefully the French team looking to drop this potential $750-800M has a Winston Wolf (or a Bob) in their back pocket to make that money back.

So there are still a lot of “ifs” for this deal to happen. But our hope for the poker community’s sake is that the French team has the war chest, gets the DoJ on board, pays players back, and brings Tilt (or whatever it’ll be called in the future) back to prominence. If they can do that, we’ll never make another joke about French capitulation again. We’ll cease all the WWII French jokes in general, in fact.

Publicly at least.

 

5 Responses

  1. Chinaman

    September 28, 2011 12:03 pm, Reply

    I think you folks are way off with that number, especially when it comes the Dickshit clause you keep invoking. I think to most, the Dickshit payment was made for a number of reasons: first, so Dickshit could forge some good will by handing over a ton of cash, and two, to maintain his poker site’s operation. In the end it cost him more grief for his trouble, but oh well.

    We’re talking about a completely different scenario here. I’m inclined to believe that a financial resolution hinges, almost expressly, on the repayment of player funds. Online poker needs legislation to operate in the U.S., and as such, the DoJ can’t legally act on that future premise. If FTP is ever allowed back in the U.S. it will be because of new regulations, new ownership and with new legislation from the Fed and not because of any payout. I don’t think the Dickshit number is in play at all.

  2. FrinkFrank

    September 30, 2011 9:27 am, Reply

    Qoute:

    “If they can do that, we’ll never make another joke about French capitulation again. We’ll cease all the WWII French jokes in general, in fact.

    Publicly at least.”

    Learn your history, Americans and French were ON THE SAME SIDE in WWII. Seriously, are you a retard? Is this what you Americans learn in school? That you “beat Europe” in WWII? You Americans are so smug, yet you base your smugness on false grounds. Learn your history! WWII was between GERMANY and THE REST OF THE WORLD! America, and ALL OF THE REST OF EUROPE, were ALLIED AGAINST GERMANY (Hitler, the Third Reich). America didnt win anything. America gave some military support to its European allies, who in turn defeated Hitler and the Nazis. Wipe your smugness off your face!

    You Americans are the ones that got us into this mess to begin with. Typical, you Americans mess it up, and we Europeans have to come to the resque.

    Furthermore, know that you didnt invent democracy, the Frennch did, in the French revolution. Your founding fathers copied the ideas from the French. Yet somehow, Americans seems to think they invented democracy.

    As if thats not enough, Americans call America “the greatest democracy on earth”. HA! What a foolish joke! America is so far behind Europe they are rediculed in Europe. One of the pilars of democracy is human rights. A basic human right is economical safety. European states have understood that, Americans have not.

    And look at the mess you are in these days, economically. Quite funny. We here in scandinavia are the richest countries on earth. We have the highest standard of living on the earth. We have a better economical system, less corruption, less social problems, less poverty, less unemployment, universal health care, economical safety for everyone, and not least a more democratic system of governance with less centrated power, and more openness, in addition to all the basic traits of democracies Amiricans seem to think they are alone about.

    Get real Americans. You are behind in many areas.

  3. Frenchman

    October 9, 2011 6:28 am, Reply

    “If they can do that, we’ll never make another joke about French capitulation again. We’ll cease all the WWII French jokes in general, in fact.

    Publicly at least.”

    That’s very kind of you… However could you please also rename your fries “French fries” instead of “Freedom fries” ? We would feel so much better… :-)

    PS: “French fries” are actualy from Belgium… Apologies to all Belgian fellows…

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