Investors’ Chips Riding on Club : Games: Players International stock has soared with the company’s plans to market telephone call-in versions of ‘Jeopardy!’ and ‘Wheel of Fortune.’

Thanks to its spokesman, actor Telly Savalas, Calabasas-based Players International Inc. is well known to some television viewers. But lately, the company has attracted attention from investors, too--this time, with help from Merv Griffin and Alex Trebek.

Savalas, who played the lollipop-sucking New York detective “Kojak,” has for several years been the TV pitchman for the company’s Players Club, which provides discounts at casinos for “middle-roller” gamblers: those who bet more than the typical Las Vegas or Atlantic City tourist, but less than the “high-rollers,” whose business the casinos actively court.

Since early May, the stock of Players has climbed 82%, from $4.25 a share to its close of $7.75 a share Monday. And trading volumes for the normally obscure stock have soared too. On June 1, 926,500 shares--or 12% of the outstanding shares--changed hands on the over-the-counter market. On average, about 25,000 shares traded each day in March and April.

The rally started after Players International’s May 10 announcement that it will soon market telephone call-in versions of the popular TV game shows “Jeopardy!” and “Wheel of Fortune,” under an agreement with Merv Griffin Enterprises, which produces the shows. Players said “Jeopardy!” host Trebek will star in television ads for the “Jeopardy!” game, which it plans to air during telecasts of the show.

“I think the investment community is in love with ‘Jeopardy!’,” said Greg Kieselmann, an analyst with L.H. Friend, Weinress & Frankson Inc., a Los Angeles brokerage that makes a market in Players’ stock.

But the stock seemed to get an even bigger boost after May 24, when Players announced that it expected its profit to more than triple to about $2 million for its fiscal year that ended March 31, from $655,000 the previous year. (Last year was the company’s first profitable year since it was founded in 1984.) Players also predicted that its fiscal year 1990 revenue would jump 36% to $16.4 million.

Players Club now has about 92,000 members who pay $125 for a one-year membership that provides them with cheaper air fares and discounts of 25% or more on room rates and for vacations in gambling spots like Las Vegas, Atlantic City or even Cannes, France.

In response to its mailings and TV advertising, Players gets about 50,000 to 70,000 inquiries about its club every month, according to Vice Chairman David Fishman. About 10% of the inquiries lead to new memberships, but almost everyone who calls gets put on Players’ list of gamblers and casino visitors, which now includes about 3.2 million names, Fishman said.

Those names come in handy for Players’ other related lines of business: operating a few casinos on cruise ships and marketing automatic teller machines tailored to give cash advances to gamblers. They also should help with a soon-to-open division that will sell gambling-mecca travel packages to people who aren’t members of Players Club.

But the main reason for Players’ predicted profit and sales growth is the growth of the club, Fishman said. The club swelled to about 90,000 members at the end of March, from about 71,000 members a year earlier.

The club keeps getting bigger by attracting new members, as well as keeping about 60% of old ones from year to year. In fact, Players considers its estimate of membership renewals so reliable that it accounts for the cost of acquiring new members as if it was an investment that paid off over several years, as renewal fees keep coming in.

So instead of deducting all of its current-year membership acquisition costs from revenue each year, Players deducts them over the course of three years. And until a given portion of the costs is deducted, it remains on Players’ books as an asset.

If membership renewals fell off dramatically--reducing the typical term of a membership--Players could be forced to write off some of those assets, hurting profits somewhere down the road. But Players’ chief financial officer, Harvey Goldberg, said that’s unlikely. “The numbers we’re doing are very conservative,” he said. “It’s absolutely no problem whatsoever.”

And analyst Kieselmann, in a January research report, said that while the accounting may be “controversial to some,” it is “conservative and appropriate.”

Investors seem confident in Players despite apparent troubles in the gaming industry generally. Total gaming revenues in both Las Vegas and Atlantic City increased in 1989 compared to 1988--but only barely so in Atlantic City, leading to the demise of one casino there. And with the opening of Golden Nugget’s Mirage in Las Vegas and Donald Trump’s Taj Mahal in Atlantic City, there is concern that too many hotel rooms have been built or are about to be opened.

But Fishman said Players can withstand the troubles in the casino industry. If the casinos hit hard times, he argued, that will just give them more incentive to attract the kind of guests that Players Club can provide. “That’s good news for us,” Fishman said.

“As long as they continue to grow, they need us,” Fishman said of casinos. “And if they have trouble growing, they need us still more.”

THE RALLY IN PLAYERS INTERNATIONAL’S STOCK

The stock of Players International, a Calabasas operator of a club that provides discount travel and room rates to “middle-roller” gamblers, has risen steeply in the last few weeks. The rally followed Players’ announcement of a telephone version of the game shows “Jeopardy!” and “Wheel of Fortune” and its prediction that its fiscal 1990 revenue would jump 36%.

Jun. 8: $7.88