Grand Prix Participation

Author: Mark Kaprielian

December 1997

I.                    Participation in Grand Prix program

A.            Reasons why we should participate

1.             From the USCF description of the program, "...is a year-long contest to promote high standards in American chess"

2.             It will attract some of the very active and top players to attend.

3.             It provides, by the nature of the rules, a contribution to the Professional Players Health and Benefits Fund.  By participating, the club if supporting chess at the Professional level.

4.             By the nature of the rules, it helps impart a positive image of the stability and organization of the club.  I.e. the criteria for participating are not easily met by small, individual clubs.

B.            Some key rules to keep in mind

1.             The prize fund for which all masters are eligible must equal or exceed $300 guaranteed.

2.             Top prizes must be unconditionally guaranteed.

3.             Even if prizes are raised at the tournament, no additional points can be awarded.

C.            Current Participation

1.             We currently have two events that, by nature of the prize fund, qualify as GPP event, namely the Club Championships and the Stan Crowe Memorial.  In the past, we have met the minimum criteria and hence the minimal number of points for a GPP event.  The following details the financial impact of raising the GPP for the events and taking advantage of the rule that moves you to the next level of GPP for contributions to the Benefits Fund.

a)             Assumptions:

(1)           Targeting a GPP of 15
(2)           Entry fee is projected at the member rate for minimal income. (as most of our players have now joined the club this has proven to be a good assumption)
(3)           Projected number of  paid entries is 40
(4)           Projected number of non-paid entries 10
(5)           Entry Fee of $5 per round minus 1 round for Members
(6)           $1 contribution per player to Benefits fund to get next level of GPP points awarded.
(7)           Computerized pairings and submittal to get $ .15 per game rating fee.
(8)           5 Rounds  (small # of rounds cost more larger)
(9)           Prize fund for the Open Section is $500 ($360/$140 for example)
(10)       Class Prizes totaling $120 (60/40/20)

b)             Financial Analysis

(1)           Expenses
(a)          $500  prize fund
(b)          $120 Class Prizes
(c)          $  50  contribution to Benefits Fund
(d)          $  22  rating fee
(e)          Total equals $692
(2)           Income
(a)          $800  Entry fees (40 * $20)
(3)           Associated costs not considered
(a)          Pro-rated advertising costs
(b)          Pro-rated facility costs
(c)          Gain/loss of other events during the year

c)              Conclusions

(1)           If projections are met, the event is self-supporting with $120 projected net.  This number is actually less when other associated costs are considered.
(2)           As long as the assumptions hold true, then the event, when considered on it's own is relatively low risk.

D.            Consideration of making all our events GPP qualified.

1.             Why we may want to.

a)             Even greater attraction for masters to attend.

b)             Makes it easier for masters to obtain GPP points as it accommodates their schedules by having some GPP points in this area always available.

c)             Assuming two events at 15 points and nine events at 10 points, if one master won all eleven events, they would earn 74 points.  This would place them in the top twenty based on 11 months of 1997.

d)             Requires no additional labor

e)             Greater prestige for our club

2.             Arguments against.

a)             The number of Masters in the area likely to participate is relatively small.  In 1997 with 11 months reported, only two Massachusetts masters are in the top 25 contenders.

b)             To date, with free entries for Master being in place for a year, we've only had five masters play in an event at the club.

c)             Money diverted from other uses at little concrete benefit to club members.

3.             Financial Analysis

Without attempting to present a great deal of detail here, given the current Budget which has no Newsletter costs then running different attendance scenarios through the current budgetary spreadsheets yields :

 

Paid Attendance

Prize Money Returned

Comments

25

100%

All other expenses including Facility donations would have to come out of Dues income

30

85%

 

35

75%.

Would probably give us a balanced budget if we keep printing and mailing costs down

40

66%

Would put us money wise about where we are now

45

60%

Puts us on Prize money % of where we are now.  Could support additional expense beyond what we have now.

 

The Average attendance at the club is shown below:

 

1995   

23

1996

26

1997   

34

 

Since last July we've averaged about 40 people

 

Let's assume that on average we've had either two masters or 1 master and one new to USCF who isn't paying each month.  Also assume, that in the past, for some of the events, the TD did not pay and in the future, will not pay.  If you do that then our paying averages are three less, making our effective attendance as follows:

 

1995   

20

1996

23

1997   

31

 

The difference in usable income to the club, holding all things constant except the changes for making the nine additional events GPP qualified is a few dollars short of $1000.

4.             Conclusions

a)             If we used our last six months average attendance and all other projections and expenses remained the same, we could probably go to having GPP points available for every tournament without too much financial risk.

b)             Additional funds raised due to increase in attendance become locked into this program.  Further expansion of programs requiring money will require additional increase in attendance or a reduction of budgeted expenses.

5.             Recommendations

a)             Wait at least six months to see if the average attendance remains at a level of at least 40 paying players, which is the number required to maintain the club with it's current programs.

b)             Review the clubs programs to establish a new budget before committing to this cash outlay.

c)             Weigh the benefit of instituting this program versus others programs.