Understanding the Payout Structure of Large Events
Winning a million dollars (or tens of thousands of dollars in smaller tournaments) is something that most people dream of. Winning a million dollars playing fantasy golf is basically a dream inside of a dream. By the way, how great was the movie Inception? I’m still a little bitter about the ending though. The top was spinning on the table, but then it wobbled right before the screen cut to black. Was Leonardo DiCaprio still stuck in limbo or was he back in reality? I want answers!
Let’s get back to the subject. The ultimate goal when we enter a tournament is to win it, but before we delve into the strategy of building tournament lineups, it’s important to understand the payout structure of these massive tournaments. For our example, let’s take a look at the payout structure for the 2015 PGA Championship Millionaire Maker. Everyone sees the $1,000,000 prize at the top, but very few stop to analyze the payouts below. Here is a breakdown of the payout structure for this Millionaire Maker event:
| 1st | $1,000,000.00 |
| 2nd | $100,000.00 |
| 3rd | $60,000.00 |
| 4th | $40,000.00 |
| 5th | $30,000.00 |
| 6th | $20,000.00 |
| 7th | $15,000.00 |
| 8th – 10th | $10,000.00 |
| 11th – 13th | $7,500.00 |
| 14th – 16th | $5,000.00 |
| 17th – 20th | $4,000.00 |
| 21st – 25th | $3,000.00 |
| 26th – 30th | $2,500.00 |
| 31st – 40th | $2,000.00 |
| 41st – 100th | $1,500.00 |
| 101st – 200th | $1,000.00 |
| 201st – 300th | $750.00 |
| 301st – 400th | $500.00 |
| 401st – 550th | $300.00 |
| 551st – 750th | $200.00 |
| 751st – 1000th | $150.00 |
| 1001st – 1300th | $125.00 |
| 1301st – 2000th | $100.00 |
| 2001st – 3000th | $80.00 |
| 3001st – 4000th | $65.00 |
| 4001st – 5300th | $50.00 |
| 5301st – 7000th | $40.00 |
| 7001st – 12000th | $35.00 |
| 12001st – 24000th | $30.00 |
| 24001st – 45840th | $25.00 |
Now, before we break this down, I have nothing against entering these tournaments. I am all for chasing that million dollar dream. However, if you are going to enter these tournaments, you should know the payout structure. Let’s start with the total prize pool of the tournament, which is $3.3 million. This seems like an enormous prize pool, but it’s cut down drastically after first place. Nearly one-third of the entire prize pool (30.3%) is awarded as the top prize. If you sum up the top ten prizes, it equals $1,295,000, which is 39.2% of the entire prize pool. With 188,900 total entries, that means that 0.01% of the field is going to win 39.2% of the prize pool. You may think that you are special, but if you aren’t a member of that 0.01%, odds are it’s not going to be a profitable venture.
Let’s take a look at the prizes down the list. The contest pays out prizes to the top 45,840 places. With that many places being paid, making money in these tournaments should be easy, right? The problem with is that those people that finish between 7001st – 45840th don’t even double their buy-in. Only the top 7000 places and win at least $40, which is double the entry fee. This means that less than four percent of all lineups are going to win twice as much as their entry fee. If you are entering a ton of lineups, you are going to need a big cash in order to be profitable.
Now, to gain a better understanding of how top heavy these tournament are, let’s give a real-life example. Let’s say that you enter the maximum entries into this tournament, which is 100. For our purposes, let’s say that you have a team that finishes right in the middle of every percentile (1889 spots). Now, you are probably thinking that you are smarter than the average bear, but let’s go with it. In this example, you would finish in 944th, 2833rd 4722nd, and so on, and so on. In this example, you would spend $2,000 on entry fees and only win back $870. If you had this same distribution of scores in a large 50/50 contest, you would expect to win $2,000 (minus the rake, of course).
This may sound like doom and gloom, but hey, someone is still going to be walking away with one million dollars. The point of these examples isn’t to steer you away from playing these tournaments. The goal is to show you how truly top-heavy the payout structure is so that you can temper expectations and have better bankroll management.
Most casual DFS players treat these events as profitable ventures, but only a small percentage of the field is going to be profitable. Knowing how top-heavy the payouts are is beneficial for two reasons. Now that we’ve gotten that out of the way, let’s get into the fun stuff!