Like the the title says - I’m a relatively new TD, with mostly experience running local blitz tournaments for “honor and glory.” Everyone has a good time, and the ratings fees work out in the wash of drinks and trash talking. However, I’m interested in trying to start up some more “serious” chess tournaments, but I’ve run into a Catch-22. Without a prize pool, the turn out will be low. I also don’t want to be out a bunch of money - I’ve no interest in making money, only breaking even. Does anyone have any advice in how to get started with this? I’m particularly interested in the idea of “Prizes by number of points” as discussed in the rulebook, but havent been able to wrap my head around a proper entry fee to # rounds to $prize "equation ". Any advice would be much appreciated!
The Texas Chess Association is implementing point based prizes in the 91th Southwest Open this year, likely for the first time ever. What I did to figure out approximately how much the point based prizes was to see how the prizes I thought of would cost if they were awarded in the last few Southwest Opens and used the average of those costs. You can see the registration page here for an example. You could do something similar by looking at tournaments that would be similar to what you are planning on organizing.
A common practice for newer or uncertain events is to award percentage based prizes. Such as 50% of entry fees - 1st place, 25% of entry fees - 2nd place, etc. You can divide and break it up any way that you would like. This ensures that you prevent loss at an event and guarantee a percentage in profit. You are correct that you need more money to bring more people, but that isn’t always a requirement. Many players look for low-cost events without a prize pool because they just want to play chess. Higher level players will be more prize oriented. Overall, you should determine the goal of the event. Is this a high-end event for masters? Is this a monthly chess club tournament for players over the weekend? Is this event for a special event or championship? All of those factors will help you determine the best path forward. I started running monthly events with a $200 first place prize because I felt like I could reach that easily and from there we have built successful events with growing numbers.
Bill Smythe has a lot of experience with plus score events. If you have a four round tournament with 15 players and no draws or requested byes then you can end up with 1 @ 4-0, 4 @ 3-1, 6 @ 2-2 and 5 @ 1-3. An entry fee of $X with 4-0 getting $6X and 3-1 getting $2X then you are left with $1X for other expenses. 3.5-0.5 can happen with two people that would otherwise be 4-0 ($6X) and 3-1 ($2X) so having 3.5-0.5 get $4X keeps the numbers the same. As would 2.5-1.5 getting $1X.
If there are proportionally more significant organizer expenses then the payout would need to be less. For instance, with a $1 entry fee then the rating fee for 15 players is $7 and having 4-0 get $3 with 3-1 getting $1.25 would break even only if there are no other expenses for the site and supplies (figure 3.5-0.5 would get $2 and 2.5-1.3 would get $0.50 - note that $1 from a 16th player would match the $1 in additional rating fees).
Percentage based prizes (already mentioned) also work. You might need some class prizes as well (50% 1st, 25% 2nd, 5% top of those not in the top quarter of ratings, 5% top of the bottom half of ratings, 5% top of the bottom quarter of ratings). Pick the percentages that work best for you.
I’m going to be taking a thorough look at the SW Open! Along those lines, for that many players, and that much money - how do you handle all the payouts? That’s one of my (major) back-end concerns. Checks? Paypal? Wire Transfer? It just seems like a massive headache of fees, forms, and taxes. That’s one of the main reasons that I haven’t worried about entry fees and prizes so far.
Regarding the prize pool - the intention was more to make it “worthwhile” for players to come play, rather than actually make money. It’s one of those balancing acts (in my mind) - make it cost enough for people to take it seriously, but cheap enough that everyone can play. While most people want to play, investing an entire day or two without any chance of payout seems to be a limiting factor for a lot of people I’ve talked to. Last thing I want is to take the time and energy to set it all up - have not enough show up, and be out money on top of it 
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Thanks for the help on the algebra! I’d never thought of just putting it down to the Swiss scoring rates, and then building a simple equation from there! I was worried I’d set something that seemed reasonable, and realize too late that I hadn’t properly accounted for the distributions of score groups.
Thank you all for your insight so far!
Re Plus Score: you probably remember Pascal’s Triangle from junior high school algebra. (x + 1)^4 = 1x^4 + 4x^3 + 6x^2 + 4x + 1x^0. Note the coefficients are 1-4-6-4-1.
As Jeff (almost) notes, a likely distribution of scores (ignoring draws) in a four-round Plus-Score with sixteen players will be 1-4-6-4-1. Another way to think about prizes is to split the entry fee into a “prize pot” and an “overhead pot,” say $25 per player for prizes and $5 for overhead.
Only the one player with 4 points and the four with 3 points will get prizes. So if you are lucky enough to have a free playing site and insist that your players always enter in multiples of 16 
, an entry fee of $30 will support an estimated prize fund of $400 and overhead of $80. Assume a field of 16 (ideal scenario, one more player than Jeff’s): the 4-0 player would ALWAYS get the preannounced prize of $200, the estimated four 3-1 players would ALWAYS get $50 each (another $200). And there would be $5 x 16 to cover overhead.
More realistically, you are paying for the room and want a small fee to cover your risk & your time, so maybe the entry fee is $40, and the split is $25 / $15.
This can go wrong, but it won’t go VERY wrong. Draws always help. [Players with 2.5 points would get $25; players with 3.5 points would get $100.] I confess to having used accelerated pairings to make each round more interesting AND potentially save the organizer $$ by increasing the number of draws. If one pairs upper-half losers against lower-half winners in round two, one could save EVEN MORE…but this could blow up, too!
Could one have an eleven-round plus-score and guarantee $25,600 to all who score 11-0? Not recommended. It’s a good structure for one-day, four-round events.
We owe it all to Bill Smythe!
I was running plus-score events in the late 1980’s. The prize matrix and entry fee I was using ensured that it was impossible to lose money if there were at least 16 players in a 4 round event, and virtually impossible if there were more than 10 players. (I simulated every possible result and total prizes paid for player turnout from about 8 to 20.)
I often ran the plus-score events for players who dropped out on the second day of a two-day event. A lot of these players were high rated players who had mediocre days on Saturday and were convinced that they could go 4-0 in the plus score event and win the top prize (for a 4-0 score) to possibly break even for the weekend on entry fees vs prizes won.
In practice, I seldom had to pay out the 4-0 prize amount, because two high rated players at 3-0 in the last round would often draw and the payout for two 3.5-0.5 scores was less than the payout for one 4-0 and one 3-1 score. The more draws there were, the more profitable the tournament was.
As to the original poster’s desire to run some prize events, site costs and other overhead items are often the biggest issue. Based-on prizes or percentage payouts (50% to first place, 30% to second place) are other ways of designing a tournament that doesn’t lose a lot of money.
If asked, players would prefer prize payouts be 100% of the entry fees, if not more.