Based on Prizes

Running Chess Tournaments
1

The rulebook exists, it seems, to explain that based-on prize structures should pay out a minimum of 50%, and otherwise proportionally for the turnout compared to the base. We understand that a guaranteed prize fund means what it says, and we would expect that the organizer does well when he gets a large turnout, and not so well when he get a small turnout, and the prize-winners are unaffected by those concerns. But the rules, as far as I can see, are only concerned with explaining proportionality when the turnout is less than the base. This is, in a sense, to protect the prize winning players, for in this situation, the organizer has taken the based-on structure to protect himself somewhat if the turnout is low. Why doesn’t the rulebook go on to illustrate examples where the turnout is larger than the base? Let’s say, by 20%. Surely, fairness in this case requires that the prize fund be increased by 20%, although it may be achieved through more prizes, and not necessarily bigger prizes.

Will someone clarify? I believe I have seen the records of some grossly stiffed players, in some well-attended tournaments. But, you know, the chess-players generally don’t complain, and so the organizers got away with prize fund injustice, or am I wrong? And I am thinking that surely this was discussed in the forum previously, but I don’t know where to find that discussion.

2

The rulebook does not require increasing the size of the based on prizes when turnout exceeds the based on mark. If it did so then proportional percentages might not be realistic (the organizer may have undergone additional expenses to handle the unexpected increase and a proporational prize fund increase could cause the organizer to undergo a loss when having only the based on number would have been marginally profitable). Also, a series of tournaments by the same organizer may have had losses which would finally be offset by the profit of one particularly well attended tournament.

That said, some organizers do increase their based on prize funds when the numbers grow. The old Master Challenge tournament did that, and I’ve worked for multiple other organizers that have done the same at least some of the time.

3

Just to be completely clear, I am assuming you’re concerned with based-on prize funds, not 100% guaranteed prize funds.

Fairness and legality are not always one and the same. I agree that an organizer using a based-on prize fund who draws more than 100% of his based-on figure should return a proportional amount to the players. I think such organizers do better in the long run, because players are more likely to support them. However, if an organizer pays out 100% of advertised prizes, he should have the option to keep any additional profit.

First, phrases such as “grossly stiffed” and “prize fund injustice” represent fairly serious accusations against organizers. I’d like to see either (a) support for those accusations, or (b) an unqualified retraction of same.

Second, players complain quite a bit about prizes (whether the prize fund is based-on, 100% guaranteed, or anywhere in between), especially in larger events. If you’ve never run a larger US tournament, feel free to take my word for it.

4

Rules about based on prizes when turnout is lower than the baseline are necessary to protect the players. Rules when turnout exceeds baseline are unnecessary. The players got what they bargained for.

The organizer does have a risk whenever he runs a tournament. They can lose money if the turnout is low. For that reason, they should have the option as to handle the situation if turnout exceeds the baseline. They should be able to make a business decision.

I don’t think an ADM to require payout increases will fly with the Delegates.

5

IMHO, the rule’s purpose is “truth in advertising” to protect players from getting less than they bargained for (at least beyond a certain point) when they put up the entry fee, commit their time, and incur travel costs. If turnout is higher, they will get the prizes advertised, and I don’t see how any player has been “stiffed” in any way if the prize fund isn’t increased. If the advertised prize fund isn’t sufficient reward for the players, that will show up in reduced turnout and/or death of the event. (Having said all that, I usually do increase prizes if turnout is high.)

The organizer has committed to put on an event with no guarantee they’ll recoup expenses, let alone have anything left over to show for it. If turnout goes above the base, in my view that’s the organizer’s reward for the risk they’ve taken, for the time they’ve put in, and for putting on a great event that so many people wanted to play in.

In my case, I don’t mind sharing part of that reward with the players who made it possible, but as Jeff mentioned, there are too many variables to set a specific formula for how to do so. Plus, I believe it is unrealistic to ask an organizer to eat the costs if turnout is low, and at the same time limit the reward if he/she does a great job and turnout is high.

6

And, yet, there are players who expect exactly that. I’m always amazed that there are also players who think they are being cheated if less than 90% of the entry fees are paid out as prizes. Some players don’t get that there are actual expenses associated with running a chess tournament and are utterly shocked when an organizer actually tries to earn a few dollars of profit in return for his work.

Unless the prize fund specifically mentions prizes as percentages of entry fees (such as “50% of entry fees to first place, 20% to second”), the organizer is under no obligation to pay out more than the advertised prizes when turnout exceeds the based-on threshold. Many organizers will do so, just as a good “customer relations” tactic. However, players ought to note that an organizer’s gain in a better than expected turnout may well fund losses in other events that have a lower than expected turnout.

Also, instead of increasing the prize amounts for the advertised prizes, some organizers will instead use the additional entry fee income to pay additional prizes. For example, the organizer might look at the list of entries and add additional “under” prizes based on the distribution of players’ ratings. Personally, I think this is a fairer way of “sharing the wealth” (if the organizer chooses to do so) because it potentially allows more players to go home with prize money. (Of course, with ties, it could just end up meaning that the same number of players go home with more money.)

As a delegate, I would absolutely not vote for a rule change that requires organizers to pay out more than the advertised prizes if turnout exceeds the projection, and I doubt many delegates would vote for such a change.

7

Thanks for joining in. First of all, I admit to Eastside the Rulebook has a greater raison d’être. Good one. Let me give some more substance to my issue… eventually

Putting on a tournament is a very risky business. Thanks to the organizers who do so, in spite of the odds. No one has to come to the party, and sometimes that happens.

Many players make up their mind to play very close to, if not on the next-to-the last day before the tournament. Publishing a guaranteed prize takes real courage and resources. It is the profit incentive in action in chess tournament organizing. The organizer probably may have a pretty good idea of what to expect, and designs the terms accordingly, and hopes to do better than that in attendance, and believes the rewards will outweigh the risks.

But when you do a based-on event you are admitting that you aren’t willing to take on as much risk as the guaranteed event organizer is on the line for. It is natural that the guaranteed prize organizer not increase the prizes, when attendance is “very good”. He took all those, unknown to us, risks and obligations. And really, who knows what number in attendance is very good?

But the based-on guy, or guys, or gals, did not assume as much risk, from the start. So it should not be a given that if that mark is reached, that all the rest goes to the organizer. Did you note that some early respondents who are organizers have indicated that they indeed do share in the “bounty” with their players.

But then another respondent says that I should watch my language. Yes, I did use something colorful. It got a response. But I am not campaigning for public office, I am here genuinely trying to get to an answer to actions which I do not think were right.

Take this scene: a new tourney, in a new classy hotel location; convenient to some, but not to others; put on by a known responsible entity. A two-day event. Publicity and e-mail blasts have been out for more than one and a half months. We have no idea of the organizer’s contract terms.

$26 per entry is to be paid in prizes based on an attendance of fifty. Entry fees are priced at $60 until three days before the event, and $70 after that and at the door. Let’s say more than 70 players attended. A lot of those folks registered at the door. Do you think that $1300 was the right prize fund payout at the close of the event?

8

I absolutely reject that formulation. Organizing tournaments is a business. Any organizer is entitled to keep the profit from a good turnout. After all, the players don’t pass the hat to cover the organizers expenses if turnout is low. My experience was that most players greatly underestimated expenses.

If as a business decision, an organizer decides to increase the prize fund, I would increase existing prizes and not creating additional prizes. Adding prizes will lead to more debate and can be lead to accusations of favoritism.

9

The “based-on” organizers take less risk than those who guarantee, but there is risk nevertheless. Other than prizes and rating fees, none of the other costs are reduced if turnout is low. OK, maybe you use a few less scoresheets. There is risk, there should be some potential for reward.

Will some players feel wronged? Certainly. Some people are impossible to please. But that’s no reason for a rules change. And I guarantee you the delegates will never pass a change such as Mr. Pitre proposes.

10

Is that verbatim from the tournament announcement? Or is that your calculation?

Depends on the exact wording in the TLA.

If it was anything like “prize fund $1300 based on 50 entries” then yes, $1300 is exactly right. (And yes, $1300 divided by 50 players is indeed $26 per player.)

If you’ll read the rulebook, you’ll see that “prize fund $1300 based on 50 entries” means that (among other things) if at least 50 players attend, then the full $1300 must be paid in prizes.

You have no valid complaint.

Bill Smythe

11

I totally disagree with the last paragraph. Yes, there can be accusations of favoritism. No matter what you do. But Mr. Ballou makes a compelling point. The organizer should increase prizes where the extra entries came from. If it’s across the board, Seki’s across the board preference makes sense. If you get a boatload of players from certain classes, adding an additional prize there might make sense. (I would probably not increase the prizes for just that class; there is something wrong if first C is worth more than first B) If it’s a ton of experts, adding an extra place prize or an expert prize might make sense. Let the people complain if they wish. They still got what they bargained for, so I would have zero sympathy for any complaint even if the TD’s method for increasing prizes is irrational.

12

The last question isn’t really relevant, since you don’t know - and are not entitled to know - the organizer’s expenses or profit expectations. Besides, even a based-on prize fund must award 50% of the announced prizes. So, a based-on prize fund certainly does represent real risk for an organizer. Some organizers guarantee more than 50% of the prize fund, too.

It’s not a given. But it certainly isn’t against the rules. I can understand disagreeing with the rules. And if you’d like to change the rules regarding this subject, there is a process by which one may advocate for such. However, it’s completely wrong to accuse organizers who follow the rules of engaging in misconduct.

It’s not about running for office. It’s about following the Acceptable Usage Guidelines of the Forums. You can’t make accusations without proof. And, since you’re accusing organizers of following the rules, you start out with an illogical position. Again, if you’d like to argue for a change in the rules, that’s okay. However, your language was not just colorful. It was flat-out improper.

Again, I am compelled to note that no organizer is obligated to reveal his contract terms.

It just doesn’t matter whether people paid at the door, in advance, or wherever else. What matters is whether the organizer honored the advertised prize conditions, in conjunction with the relevant parts of Rule 32.

In your above hypothetical, whether the final payout is correct depends entirely on the verbiage the organizer used in his advertising. Since virtually no organizer advertises a prize fund in terms of payout per full entry, I’ll assume the advertising said “$$1300 b/50”, which is where one would get the $26/player figure.

If the organizer pays out $1300 in prizes, that is the right payout, by rule. Accusing that organizer of some misdeed because he paid 100% of the announced prizes is completely out of line.

13

It might actually be a good thing if Tournament Organizers would be able to consistently make profits. There might be way more Tournaments held as a result.

14

No organizer must increase prizes if he reaches and goes beyond the number of entries that the prize fund is based on. He has certain fixed costs and a few variable costs that will change with the size of the entry. If he has designed his tournament correctly, he can expect to make some profit. That profit might cover his time and effort and provide seed money for future events.

It is good business to increase the prize fund if the number of entries far exceed expectations. It is a demonstration that the organizer recognizes and will reward attendance now and in the future. Many, but not all, organizers do this. Those that do not risk having players complain about the tournament and not come back. Many players do not understand or care about the costs for producing the tournament. They do simple calculations to determine if a high enough percentage of the entry fees is in the prize fund. They do not reckon on costs for the site, rating fees, TD fees, advertising, providing scoresheets and pens, and a number of other costs like ink cartridges, door prizes, copying costs, paper, bopping around to put flyers in key places, liability insurance, software, a printer, and other out of pocket expenses. These fixed and variable costs sometimes are not figured out until after the tournament is over, the rating report processed, and the organizer has time to put his feet up.

When you do have a great turnout, no one complains if extra prizes are added or the total prize fund is increased. In tournaments I have organized, I set up a chart for if and when a certain number of entries triggers an increase. I like when I have to use this chart. I have a similar chart for determining decreases in prize fund for various levels of entries. I try to pay out 70%-80% of entry fees as prizes. But that is not always possible. If I have to go below 60%, well, I have just eaten the loss. Fortunately, that has happened only twice and was a minimal amount.

IMHO, players grumble too much. Most don’t help to set up the table and chairs or help put them away. They come late to registration and expect the first round to start on time. They don’t clean up their mess; coffee cups, water bottles, wrappers, crumbs, and other stuff. They don’t help to put away sets and boards if those are provided. They talk or make noise during and after their games, disturbing others. They don’t know the rules because they do not buy a Rulebook and then complain the rules/pairings are wrong. I listen to all complaints, but discount many of the ones that are based on selfish interest. I will pay more attention when the gripes are legitimate, are about conditions I can improve, or are about things I did not consider. I will pay attention even more if you are trying to improve the overall experience for all and help out. But if your complaints are only about how much prize money you can win, I may look mean for shrugging and ignoring the complaint, but my job is to serve all, not just the complainant.

15

Everyone is jumping on the side against the OP. While I agree that there should be no rule about increasing the prize fund when more than the based on number shows up, I think it should be encouraged.

Even if an organizer does not pay out more in a higher attendance, the players are definitely not being stiffed. As mentioned by pretty much everyone, there are costs to be covered and profit is not a bad thing. We are in a society of capitalism and not a socialistic one.

Another point for not making it a rule is that the organizer or organization that is organizing the tournament, as is the case in Peoria, Illinois, loses money in one or a few tournaments the profit of the highly attended one can be used to offset those losses.

In Peoria, after losing money on a few tournaments that were poorly attended, we went to a percentage of the total collected for the prize fund. This insured that we, the club, lost no money and the players received the most possible in the prize fund.

I say that organizers should be encouraged to add to the prize fund if attendance is high. This is good business, especially in light of local tournaments that we see across the country.

16

I don’t understand your point, Ron. Absolutely no one has argued that we should discourage increasing the prizes. Several posters discussed the best way to increase them, which certainly suggests they are fine with it if the organizer does it. It is the assertion that the organizer engaged in questionable behavior by not increasing them and that there ought to be a rule requiring it that people are reacting to. It appears you concur with that view.

OP has been a friend of mine for the better part of four decades and he is a man of high integrity. I just think he’s off base on this one.

17

One thing some organizers will do is pay 100% of the based on prizes if only 90% show up (NOT required). If 110% show up then paying only 100% of the based on prizes balances out for such organizers. When you get 150% of the based on numbers then it is usually good public relations to add some prizes (but not necessarily to increase the prize fund by 50%). My personal preference is to add more class and place prizes rather than increase the top prize, and I have done things like take a $100-first, $40-second and insert a $60 prize between them, such as was done at the side event at a Pan-Am in Chicago in the '90s (many of the strong players I’ve talked to have a preference for more prizes that spreads the money over multiple people as opposed to a huge payday only available to the tippy top).

18

I’m sorry if I wasn’t as clear as I should have been on this.

In no way is the organizer, who does not increase the prize fund when the attendance surpasses the based on number, doing anything wrong, at all. I do disagree with the OP poster on that.

I feel it a good practice to increase the prize fund when feasible and agree with him that it would be good to be raised.

I did say that we, the USCF, should encourage organizers to increase the prize fund, when possible, in these circumstances. I think the point should be that increasing the prize fund when the attendance is higher than expected and feasible, is a good business action that benefits both the organizer, USCF and the player.

Now, I know it is not always possible to increase the prize fund because of costs, both having to do directly with that tournament or even indirectly. And this would fall under the category of not possible to increase the prize fund.

19

Sometimes “not as much risk” is all the risk an organizer is able to take on. Think of a new organizer putting on a tournament in an untried venue. The venue offers a lot of pluses and is a little bit expensive. The organizer’s cash is limited. If turnout falls below half of the based-on, he could lose most of his capital and not have enough left to try again. If it falls only slightly below, he’ll break even. If it meets or exceeds the based-on, he’ll come out ahead and actually get to pay himself, or maybe sock the money away to give himself a bigger cushion. Maybe that will even allow him to offer a larger prize fund the next time around.

You’re essentially arguing that he should be willing to lose hundreds of dollars if turnout is low, but if it’s high, he shouldn’t get to make hundreds of dollars – he should return the bulk of the surplus to the players instead. On what basis would anyone in his right mind take that much risk without the chance of any meaningful reward? Where do you get off demanding that he do so?

Suppose the event is a catastrophic failure: only 25 percent of the expected number of players show up. Yet the organizer still has to pay 50 percent of the prizes. That’s the line below which the organizer isn’t allowed to cut his losses. Fortunately for him, there’s also a line – the based-on target – above which he can take comfort that his costs won’t keep going up as turnout increases (except for rating fees, or the possibility of having to rent more space). You’re saying, leave the lower line alone, but take the upper line away!

I’ve been trying for the past month to plan a tournament, and it’s #### like this that makes me wonder why I’m bothering.

20

First of all let remind everyone that if the prize fund is less than $500 then if the based on is less than 50%, the prize fund can be reduced by more than 50%. Having said that I do agree that the idea of increasing a prize fund is a nice thing to do if you have a large number over the based on number. I do not think this should be a requirement, but it does make good sense as it will be popular with players. On the other hand I have heard a few players complain about a based on prize fund where there are based on class prizes and nobody in a particular class plays.

That complaint is that there advertised prize is not paid as there are no players in that class, but that the money marked for that class goes into the organizer’s pocket. This could (but I don’t know of any instance) result in less than 50% being paid due to a class prize not being paid due to lack of players in the class. Again the based on class prizes were meant to protect the class players from “prize fund injustice”. Example is a prize fund $300, b/30; $20 each class b/5 and there is a turnout of 20 players with 10 from a single class. Then that class prize can’t be reduced.

Larry S. Cohen