Adventures in Backing

by Bryan Devonshire

I know that many of y'all out there are curious about what the deal is with backing arrangements. In this article I will discuss all the aspects of backing, from both sides of the equation. Backing is a big element of tournament poker, simply due to the immense cost of regularly playing on the tournament circuit and the intense fluctuations in tournament poker.

A backing agreement is when one person invests money in a player. A predetermined percentage is agreed upon between the backer and the player, and is based on a number of factors. If the arrangement is a one-time deal, then the percentage for the player is much lower, whereas if it is a long term agreement the percentage is much higher. Obviously, the track record of the horse is a major consideration for fair percentages. As a general rule of thumb, one-time events are 10-20% for the player, while long term agreements are 35-50% for the player.

What sets long term agreements apart from short term ones is the concept of "make-up." When a backer puts a horse into several months or years worth of events, all the entry fees must be paid back to the backer before profits are chopped between the player and the backer. For example, when I cashed in the $25,000 World Poker Tour No-Limit Hold'em Championship in April I received $46,410. Now, this was a one time deal, but I was playing for 30% of myself since I had satellited in. So, before I put any money in my pocket I had to settle the make-up. I entered two satellites for $3k each. In the second, my backer paid $8500 to Kevin Song to chop heads up (Kevin already had an entry). So, $46,410 - $14,500 = 30,910 in net profits. I got 30% of that for $9,273. Not bad for three days work. My backer profited over $20k on the 3 day adventure, and we launched into a long term partnership.

Now, you as a player might be thinking to yourself: "I'm a winning player, why would I want to surrender some of my profits?" There are a number of reasons:

Fluctuation - My pre-WSOP schedule this year had me budgeted for $63k worth of events. I was only to be playing 26 of the 55 World Series of Poker events: one each at $10k, $5k, and $3k, and the rest were $2,500 and under. Now, it's really easy to go a long, long time without a cash, and even a longer time without a significant cash. I've gone 16 events without a cash before, and over 30 events without a significant cash. The cost of playing alone is enough to break most of the poker players running around.

Opportunity - There is a lot of fame and fortune to be had with tournament success. There is still plenty of value out there with TV endorsements and other sponsorships. That money goes straight to you, and not to your backer. You have the opportunity to gain knowledge and experience without the risk of financial ruin.

Psychological Stability - It's much easier to walk out of a tournament after busting knowing that your bankroll has just as much money in it as it did before the tournament. The pressure to "cash" is not there, so you are able to open up your game and properly play to win.

For me, I will never play in a tournament that is more than 5% of my cash bankroll, and when I am playing a series of tournaments, I try and keep that number more around the 3% size. Thus, I try to be backed for all tournaments that are above that threshold.

Why do backers back people? Well, it's simple. Free money. It's really like putting a bunch of money into the DOW. Sure, it might go down in the short term, but in the long term it's going to show a positive return. In a long term backing agreement with make-up, if the horse is an actual winning player then the backer is going to make money in the long term. With winning players it's not a question of if they're going to score, it's a matter of when. So they go $40k in the hole. Big deal, when they will eventually cash for $200k. More fun - with make-up, any small cash goes directly into the backer's pocket. $40k in make-up, and the player cashes for $35k? Good news for the player, since he only has 5k in makeup at that point, but the backer gets all the money.

When considering backing somebody, it is imperative to know whether or not they're a winning player. If they are but unproven I start them at 35%, and once they make a nice hit I give them a raise.

Lastly, but most importantly: It is imperative to maintain the utmost honesty in all aspects of the relationship between player and backer. These deals are done in cash and with handshakes determining the outcome of sums often over a hundred thousand. This summer I handed two bricks ($50k each) of cash to my backer, he put them in his backpack, we shook hands, and went to dinner. As a player I am completely honest about everything to my backer. From hands I played, to how much I drank last night, to past experiences, I give 100% honesty. When I back people, I expect the same thing. I will not back somebody if there is even the slightest hint of shadiness going on. I must have complete confidence in my horse's word of mouth, since that is what is attached to the poker player I am investing in.

Peace and good luck,

Devo

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EDITOR'S NOTE: Bryan touches briefly on the nature of poker deals in general in this article, making note of their "handshake" nature. Anyone who follows poker knows a rather large debacle followed Jamie Gold's record 2006 World Series of Poker Championship victory. Jamie was accused of having made one of these "handshake" agreements, and then not making good on the deal. While not directly related to backing, itself, Nolan Dalla, in "Poker Insider" here at PokerPages, investigates this matter of trust in poker.
Click here to view this exclusive news program.

About the Author:
Bryan Devonshire is a rising star on the professional circuit. Since he took second place in the first event of the 2006 World Series of Poker, he has cashed in four major tournaments, including a first place finish at the Commerce Casino. Bryan is also a featured blogger on PokerPages.com.