Funding in sports that are popular is usually not a mystery, there are a lot of avenues that the organizers can take advantage of to make money. Something such as chess however is a different story, there are only a limited amount of people that can be reached.
So I’ve been wondering about this, how are chess tournaments funded?
Chess tournaments are funded primarily through donations and sponsorships. Organizers would occasionally require an entrance fee from players or spectators (depending on the prestige of the tournament) that would add to the funding.
I’ve done some research and not a lot of people have been discussing this, however, I do have some friends that I’ve asked and I’ve gathered some interesting insights. I think I would be able to contribute something original here, let’s begin.
Common ways chess tournaments gets funded
Different chess tournaments depending on the prestige will have various methods to do this than others, but usually just a combination of the following.
Some funding strategies are practiced more than others since it works better locally or internationally, though they are all quite interesting.
Chess tournaments can get funded from sponsorships
This is probably something that is pretty common in all sporting events not just with chess, in which some business partners are willing to sponsor the expenses. Chess after all does attract some traction even if it is not as plentiful as compared with other competitions.
There are big companies who are willing to dump their money on chess tournaments so they could write it off as an advertising expense or expenditure, these are money that would go to their taxes anyway so they just spend it on tournaments.
When it comes to taxes, the amount that a company has to pay can be reduced if parts of the revenue go back into the business. Theoretically, a company will benefit more in spending their earned money in order to not pay taxes by just dumping the cash into other pursuits.
By advertising to popular events such as chess (especially if the sponsors like the game), they can get free traction with the advertising while reducing their taxes. Sponsorships in chess events after all are not as expensive as by other means.
This means that some companies will have a better option choosing sponsorship in chess competitions than others since the cost of contribution is minimal. They don’t need to spend more than they should and they can control the flow of money.
The examples of such companies can be seen in this online tournament:
Notice that in the background there are logos of different brands that are intended to capture the eye of the viewers, this is classic advertising. And this is in an online tournament! Sponsorships still play a major role even in virtual tournaments.
This is similar to over-the-board events where there will be different logos at the parts of the playing hall (or just the resting area)
Chess tournaments can be funded through donations
Donations can be a good source of funding especially when it comes to less-known chess competitions where l sponsorships are unlikely.
Sponsorships are a great source of money only if there are sponsors to begin with, minor chess tournaments do not have the same traction.
This is why some famous individuals who had a lot of financial success in their career will occasionally fund tournaments in order to support chess players.
Some of the money comes in the form of donations where a financially stable business partner or individual takes a loss in order to support the game of chess.
It doesn’t have to be an individual, it can be a collective group of people (or an organization) that will have the funding without an advertising contract in return.
A good example of this is that of Manny Pacquiao here in my home country (Philippines) where he donated a lot for chess tournaments. He is an avid chess enthusiast himself and wants to increase the prizes in some local tournaments.
Manny Pacquiao is a very pronounced boxer that has earned millions of dollars throughout his entire career, he has the financial capability to support chess events. Other similar occurrences happened in history as well where someone donated a lot of money for a tournament.
Prestigious chess tournaments can be funded through streaming
When a famous event that a lot of people will be interested in occurs, some television network organization (or streaming services) will be interested.
There are famous streaming media that are willing to pay in order to show games from prestigious chess competitions, tournaments can also be funded this way.
Platforms such as chess 24 provide online streaming of prestigious chess events from which they can earn money, of course they have to pay the tournament organizers for the right of streaming the event.
Not only that, there might be some local television network (if it is in a country where chess is popular) where there would be some value in showing some famous chess games.
Not every network after all has the legal capability to show the event if they were to commercialize it, therefore they would have to pay. The capability of the actual games being shown to a wide audience can be a bargaining chip that would bag some funding.
Chess coaching services fund chess tournaments
This is something that usually occurs more in lower-rated competitions, an event where streaming doesn’t make much sense. The potential audience is too small, not a lot of people want to watch a game played between unpopular nameless players.
However there are businesses that can benefit even in an audience that is considered small, especially those that are in the chess coaching service industry.
Some chess coaching service providers will advertise in small tournaments since the demographic is much more likely to buy their information products.
Even if the target population is too small, it is so specific (niche) that it is an audience that is more likely to buy the products. Only those who are interested in chess are willing to participate in chess events, a group of people that these businesses want to target.
These services would advertise their offerings to the players of the tournament, of course, there will be money for the right to do this that goes to the prize pool (which will be given to the winners).
This doesn’t usually appear in more prestigious tournaments since the players involved are not likely to buy the products, and the spectators in such competitions are usually masters that do not need much coaching.
Some chess tournaments can be funded by the spectator fees
There are prestigious tournaments that require spectators to have an entrance fee, this can also be a source of funding for the overall prize money.
Just like with any competition, there are tournaments where spectators need to pay a certain amount in order to access live viewing.
This usually doesn’t happen in lower-rated tournaments (since nobody is willing to pay just to watch it) but it does occur on prestigious grounds. The rate will depend on several factors such as the importance of the event and which types of players are involved.
Especially if it hosts some famous players that have fans that are willing to pay, the organizers can take it into account when trying to assemble the prize money.
The world chess championship for example has a lot of earnings when it comes to spectator fees. Even artists/celebrities that secretly like playing chess appear here in there which would increase traction, it is definitely a sold-out event.
It’s not only when there is a world chess championship though, there are a lot of spectators if at least one super grandmaster is present on the scene.
Just by imagining it, you can stipulate that some serious money can be made of this once it accumulates (there needs to be a super grandmaster present though if this is the plan).
Players can have an entrance fee for chess tournament’s funding
If there are no important players in the tournament that people are willing to pay to watch, some local organizers would choose to implement a player fee.
I have seen some really small chess tournaments require participants to pay some money in form of an entrance fee, such that they would be brought together to make the prize money.
This is especially true if there are no sponsorships, donations, or anything and where funds can be drawn. The money has to come from somewhere, and it can come from other players which have chosen to participate in the tournament.
This actually makes sense if it is someone unrated, the organizers will take the time to pit you against stronger opponents. The fee can serve as your reason for participation as a sign of honor (at least at first).
This is usually the case in your early tournaments (as long as you don’t have a title), you will have to pay to a certain degree.
The government will occasionally fund chess tournaments
This is an angle that I haven’t explored yet, which is that the government actually tends to support its home players. This will of course depend on the type of government and its relation to the sporting sector.
The government where the chess tournament is being played are usually supportive of sports (if all participants are from their home country), they can contribute to the prize money at all levels.
Some tournaments are even entirely funded through governmental efforts and nothing else (there is no fee for both spectators and players) just to celebrate a major sporting achievement for example. I would say though that if there is help from the government, it usually isn’t much (and is pretty rare).
But it does happen on some occasions especially in countries that are really engaged in chess-related activities, it can also be a form of publicity for the politicians involved.
Conspiracy about chess tournament funding
I heard some fishy reports online that I cannot confirm the validity, although it is interesting what it says about tournament fundings. Specifically it is about the playing hall that is being used in the actual event.
There have been reports that the playing venue occasionally doesn’t need to be funded since the hotel owners give free space in exchange for customers.
The funding from all the things I have discussed above usually goes to many things, the organizers which include the arbiters, the chess equipments, and of course the playing hall. The playing hall is not free, it needs to have separate funding too.
So if a hotel owner actually volunteers to give playing space, it is almost as if that the hotel owner is contributing to the funds. This is where the conspiracy comes in, where the hotel owners are actually incentivized to give chess organizers a playing space.
A lot of competing players in mid-sized tournaments come from overseas, of course they need accommodation during the duration of the tournament. If the playing hall happens to be inside a hotel it would be really convenient.
So convenient that there is no sense to look for any other place to rest for the night, so this is actually a business plan that could work well for the hotel owner. I have no idea if this is true but it can be, but I believe there is nothing wrong with this.
It is give and take, the organizers acquire a playing hall for free while the players give back money in terms of accommodation that they would have spent anyway, it is a win-win for everyone.
Do you now know how chess tournaments are funded?
Chess is definitely not as popular as other sports out there, but the strategies involved with getting the money are usually not that different. Don’t get me wrong, there might be some things that I haven’t been shown but I think I did a good job with all I’ve said.
These are definitely the most common strategies for funding chess tournaments the traditional way, although online avenues might be changing that.
There has been a lot more attention in chess lately, I think there is a new monetization strategy that could branch out from this traction.
I actually hope it is the case, it means there will be more tournaments for us to enjoy. You should be happy too, sleep well and play chess.