Daniel Negreanu zero markup package -- good idea? (1 Viewer)

kaimat

kaimat

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I read a little about the drama going on with pro players charging a markup on the packages they sell. I watched Daniel Negreanu's newest youtube video this morning where he addressed it and offered three tiers for his tournaments this year.

Low (buyins under $1500)
Max investment: $100
Share: 10%

Mid (buyins $1501-10k)
Max investment: $500
Share: 25%

High (buyins $10k+)
Max investment: $5000
Share: 50%

Can someone give me the ELI5 version of how this works. I'm thinking of buying the max investment for the low and mid packages, and if I lose $600 it's no biggie (ok, a little biggie), but wondering what exactly I'm buying and how the portion of the return works.
 
You're buying a piece of his action. Won't know the final % until all the buy-ins are tallied up, so you are just committing an amount ahead of time.

If you buy 10% of someones action for $10 and they buy in to a tournament for $100, and cash for $1000 they get $900 and you get $100.
 
Did not watch vid, but I assume if you buy 10% of a $1k buy-in, you pay $100 and get 10% of any winnings.

If you pay $110 or $150 for that same 10% action, the amount over $100 is the markup, determined by supply & demand of the players themselves.

I wonder though if and how how much "markup" goes towards living expenses and time?

I wouldnt go near this unless all variables are known ahead of time (maybe they are, I didnt watch vid, but how much youre paying for markup and what % of the winnings you get should be known waaaay before you contribute anything).
 
mummel said:
Did not watch vid, but I assume if you buy 10% of a $1k buy-in, you pay $100 and get 10% of any winnings.

If you pay $110 or $150 for that same 10% action, the amount over $100 is the markup, determined by supply & demand of the players themselves.

I wonder though if and how how much "markup" goes towards living expenses and time?

I wouldnt go near this unless all variables are known ahead of time (maybe they are, I didnt watch vid, but how much youre paying for markup and what % of the winnings you get should be known waaaay before you contribute anything).
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The way is was explained it sounded like he assumed the audience had a working knowledge of how this worked. I do not. I'm wondering if I buy in at the max level am I paying that amount once and it is covering the whole season or am I obliged to pay that amount per buy in?
 
The only reason to do this is entertainment purposes with money you can afford to lose. This will mostly appeal to fans of Daniel who want to sweat him at the WSOP. I think that’s who he is targeting too.
 
He is selling a portion of his action with no markup at all depending on the buy-in:

Low Rollers: Up to 10% of his action in the <$1500 events. People can get a piece of his action for anywhere between $5 and $100.
Mid Stake: Up to 25% of his action in the $1500 to (and including) $10K events. Purchase range from $100 min to $500 max.
High Rollers: Up to 50% of his action in the >$10K events. Purchase range is $500 to $5K.

He is unsure of the minimum on the mid and high rollers and nothing is set in stone yet for the minimum purchase amounts. Understandably it would be a nightmare to try to organize 4000 $5 purchases for a High buy in event.

Nothing is available yet.... Stay tuned. If I am in the right place at the right time when he announces it I will be throwing $100 his way for a piece of some mid stakes action.
 
A reason for a big name pro to do it is to mitigate variance.

He has sponsors. People that put up big money for him to sit at the table. Being in every event possible, also helps put/keep his name out there and sell books, video series, etc. That is a stable income.

Essentially, if he sells 100% of his action, he plays poker and comes out financially ahead, win or lose. Sure he surrenders any potential windfall profit from winning, but then again winning more events secures future investors so he can continue playing for a steady profit.
 
He is only selling a portion of his action... However I forgot that he gets bought in by his sponsors. So is he just pocketing that money?
 
I think it doesn't matter how they use the markup funds.

I also think it doesn't matter if somebody sells more than 100% of themselves as long as they have the means and willingness to cover the payments should they score. This reminds me of the play/movie The Producers.
 
abby99 said:
I think it doesn't matter how they use the markup funds.
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Totally agree.

abby99 said:
I also think it doesn't matter if somebody sells more than 100% of themselves as long as they have the means and willingness to cover the payments should they score.
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Ehh, less with you on this one. It creates an incentive structure where the higher a person places the worse financial position they are in. Maybe integrity/prestige is enough to outweigh that, but I wouldn’t want to be counting on it as a person buying a share of action.
 
msuroo said:
Ehh, less with you on this one. It creates an incentive structure where the higher a person places the worse financial position they are in. Maybe integrity/prestige is enough to outweigh that, but I wouldn’t want to be counting on it as a person buying a share of action.
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I can't argue with that. It's not as if anyone's never been stiffed by a pro. Too bad there's no way to know for sure how big a piece of themselves they have. Either way, the buyer is still relying on the seller's integrety.
 
abby99 said:
I can't argue with that. It's not as if anyone's never been stiffed by a pro. Too bad there's no way to know for sure how big a piece of themselves they have. Either way, the buyer is still relying on the seller's integrety.
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For instance, I would strongly recommend knowing if Howard Lederer has oversold his shares, and if Jesus Ferguson sold shares... well I wouldn't expect his backers to get paid even as he was slipping on the bracelet on national television.
 
This was discussed on the DAT podcast and it seems like Daniel is planning to play the low dollar buy-in events so he has a shot at the “player of the year” award. He also said having others have a piece of his action would inspire him to play better in events where he might be tempted to play too loosely. Selling at no markup is pretty cool of him especially compared to what some other sell their shares for. I presume getting a piece of his action will be like getting jack chips. Have a speedy internet and be logged in to PP already.
 
Poker Zombie said:
For instance, I would strongly recommend knowing if Howard Lederer has oversold his shares, and if Jesus Ferguson sold shares... well I wouldn't expect his backers to get paid even as he was slipping on the bracelet on national television.
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I wouldn't buy any piece of either of these guys, even at a discount (negative markup). Just saying . . .
 
abby99 said:
I also think it doesn't matter if somebody sells more than 100% of themselves as long as they have the means and willingness to cover the payments should they score.
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If they sell more than 100% of themselves, they lose money if they cash no matter what. They would hope to immediately bust and take their profit
 
Assuming they can afford these buy-ins with ease, why are they selling action? What's their upside? If they don't cash? I have no idea what's going on.

Can someone explain what any of this is/means, like they were explaining it to a 5 year old?
 
I wonder how legal this all is. It could be classified as selling a security in which case the transaction would fall under the Securities Exchange Act of 1934, and this would be a big no-no.
 
ReallyGoodUsername said:
Assuming they can afford these buy-ins with ease, why are they selling action? What's their upside? If they don't cash? I have no idea what's going on.

Can someone explain what any of this is/means, like they were explaining it to a 5 year old?
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I answered it before you even asked :cool
Poker Zombie said:
A reason for a big name pro to do it is to mitigate variance.

He has sponsors. People that put up big money for him to sit at the table. Being in every event possible, also helps put/keep his name out there and sell books, video series, etc. That is a stable income.

Essentially, if he sells 100% of his action, he plays poker and comes out financially ahead, win or lose. Sure he surrenders any potential windfall profit from winning, but then again winning more events secures future investors so he can continue playing for a steady profit.
Click to expand...
 
mummel said:
I wonder how legal this all is. It could be classified as selling a security in which case the transaction would fall under the Securities Exchange Act of 1934, and this would be a big no-no.
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No, it wouldn't. The SEC does not involve itself in private deals.
 
Details on the packages posted today.

TLDW: you can buy $5-50 worth of <$1500 buy ins, $5-500 worth of $1.5k-10k buy ins, $5-5000 worth of $10K+ buy ins.

Wonder where his ROI is highest, I'd imagine the mid-stakes which would include the Main Event?
 
It's a gamble, but the upside is worth it, imo. Daniel has a long track record of consistent big results.
 
Poker Zombie said:
For instance, I would strongly recommend knowing if Howard Lederer has oversold his shares, and if Jesus Ferguson sold shares... well I wouldn't expect his backers to get paid even as he was slipping on the bracelet on national television.
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Chris Ferguson is a stand-up guy. As is Negreanu. Jesus got a bad rap from Full Tilt. He wasn't responsible for that BS.
 
RainmanTrail said:
Chris Ferguson is a stand-up guy. As is Negreanu. Jesus got a bad rap from Full Tilt. He wasn't responsible for that BS.
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Without knowing intimate details, I'd tend to agree with this. Ferguson has showed up in public since. Lederer has not.
 
As far as investing and skills go, there are countless "pros" that I would never even consider doing a deal with. But Negreanu and Ferguson are not among them. I would jump at the opportunity to stake either one of those guys. I've played with both of them several times. Ferguson is hands down, the best overall player I've ever played against - stud games, NLHE tourneys, LHE cash, O8 cash, Razz, you name it. He plays at an elite level in every game. His patience and timing are impeccable. His reads are solid, and he takes bad beats in stride, never tilting. And he always gets his money in good. He's an astoundingly good player.
 
RainmanTrail said:
As far as investing and skills go, there are countless "pros" that I would never even consider doing a deal with. But Negreanu and Ferguson are not among them. I would jump at the opportunity to stake either one of those guys. I've played with both of them several times. Ferguson is hands down, the best overall player I've ever played against - stud games, NLHE tourneys, LHE cash, O8 cash, Razz, you name it. He plays at an elite level in every game. His patience and timing are impeccable. His reads are solid, and he takes bad beats in stride, never tilting. And he always gets his money in good. He's an astoundingly good player.
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That’s why he’s still around after 2 decades+! Long term results don’t lie.
 

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