Quick question for the group. If I am running a tournament section with a $10 entry fee and cash prizes 1st-2nd-3rd $100-50-25 (based on thirty entries in this section), is there a “minimum” prize fund that must be paid out?
I saw some posts mentioning that if the “based on” prize fund is over $500 then 50% must be paid out (to be eligible to advertise in future TLAs). However, they were old posts.
So if I only get 10 players in the section, can I pay out all the prizes proportionately (33%) so first would pay $33, etc? Thanks.
In tournaments in which prizes are based on entries, if the actual turnout is smaller than the based-on turnout, prizes must be paid at least in proportion to the turnout. If the advertised prize fund is more then $500, at least 50% of the advertised prizes must be paid, which also apply to each individual prize (32C4).
Example: A tournament advertises $400 in prizes if 40 players enter. Only 10 players enter. The organizer is required to pay at least $100 in prizes, each prize to be at least 25% (10/40 = 25%) of the amount originally advertised.
The old post you mentioned is correct and you are also correct. There is a penalty for the violation of the rule which is the disqualification from advertising in Chess Life for one year.
If it is a small tournament and you are trying to build participation in future events, then as an organizer you have to take some risks to establish your reputation. I would pay out at least 70% and maybe 100% to build goodwill, to let people know that you can be trusted to pay out a substantial portion of the announced prize fund. Yes, you may “eat” about an $80 dollar loss, but it will be a good lesson in planning for the future. Those players will come back to your next event and will likely bring others. They might even not let you take the loss - have seen that happen.
I usually see clubs and organizers advertise a prize fund and, when entries are disappointing, cut it by 50% or more so that they can pay their expenses and make a profit. The habitual cuts turn players off and future tournaments have few entrants. Organizers that guarantee prize funds or pay out a very high percentage to at worst break even have higher turnouts. I am running a tournament this weekend that will guarantee and likely add to the prizes. My advance entry list is good and I expect a number of walk-ins. We will make money.
Certainly I agree with this perspective, in that having started several affiliates, I know that initial perceptions
can make or break you. Truth, quite often is secondary
to perception. And if an organizer is perceived as a skinflint, sometimes this is death for the club.