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.