How To Negotiate A Poker Tournament Deal
24 June 2008How To Negotiate A Poker Tournament Deal
As the host of a poker tournament you aren’t involved in who gets how much money if the remaining players decide to quit playing and divide up the prize pool. However, if you are one of those remaining players, how you negotiate can have a large impact on how much money you end up walking away with. So if you want to get the most money for your chips, what should you do?
It actually isn’t all that difficult to get good value for your chips, assuming you know what you are doing. Say for instance you are playing in a large tournament. There is $1000 in the prize pool, and you are down to the final six players. The prize breakdown for the tournament has been announced and looks something like this
1st $400 or 40 %
2nd $250 or 25 %
3rd $150 or 15 %
4th $100 or 10 %
5th $65 or 6.5 %
6th $35 or 3.5 %
And say that the remaining chip stacks are as such
1st 30%
2nd 25%
3rd 20%
4th 10%
5th 10%
6th 5%
Large Stack Tactics
If the players started negotiating a deal, the 1st and 2nd place chip stacks should argue for a straight breakdown of the prize pool based on percentage of chip stack. This will hurt the chip leader somewhat, as he will only be getting $300 for his $400 worth of chips, however, out of 6 people remaining he will be getting more money than if he had ended up in second place, which is very possible. Thus $300 is a good deal for the chip leader. $250 is an even better deal for the second place player. He is getting actual value for his chips. That doesn’t often occur. In most negotiated deals, the chip leaders do not receive fair value for their chips. That is because the small stacks are worth a premium.
Small Stack Tactics
In this hypothetical deal, the shortest stack would receive $50. That may seem like a good idea for him, as it is more money than the last place prize of $35, however it is not a good deal. The reason for that is he is already guaranteed the $35, and if the tournament continues, he might get lucky and win the whole thing, netting himself $400, which is 8x what he would walk away with from the deal. In fact, a good estimate of the stack value is to look at it like this, if he goes all in he would have a 50% chance of winning. If he won he would have 10% of the chips, worth approximately 10% of the prize, or $100. If he loses he gets $35. So he has a 50% chance of getting $35, a 50% chance of getting $100, which makes his stack worth at least $67.50, with an additional chance of placing even higher. A person with this stack should demand a premium for his chips. If I were the smallest stack I would be trying to get $100 for my 5% of chips, and if I negotiated well, would expect to end up with around $75.
Other Things To Consider
There are a couple of things which will affect the final deal. Who proposes the deal matters a great deal. The person who first proposes the deal is at a disadvantage. The deal they propose is the best they can hope to achieve. The person countering can always argue for more, but once you lay out terms you are stuck with them. Additionally, pay attention to who has time constraints, if you have no where to be, you can strike a harder bargain than someone who has to be home in 30 minutes. After all, you can always say, screw this, let’s keep playing. A person with outside considerations, say an angry spouse, will be more willing to take a pay cut to finish the game. Finally, look at the relative skill of the players. A newbie at a table full of pros shouldn’t expect to get the best value for his chips. After all, he is less likely to win than his chip stack indicates. In the above scenario, the 5% stack might not like the $50 deal. But if he was new to the game, and thought the other players could pick him apart, it might be fair value for him.
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