How does backing deals normally work?

Hi all.

I was wondering how backing deals normally work??
Does the backer get his % of the buy-in, back in the same % of the price the player wins??
That is if the backer backs the player with 25 % of the buy-in. Does the backer then get 25 % of the price in return??

Thanks,
John

[Greg (FossilMan)]

If it's a one-time deal for a tournament, it should work out where any money won is first applied to the buy-in, then the backer and the player split the PROFIT according to the deal. So, if it's a 25% freeroll, $1000 + 60 buyin, and the player finishes high enough to win $1500, then the backer should get $1050 plus 75% of $440, or $1380. The player would get 25% of $440, or $110.

If it's a long-term deal, the proper way to structure it is actually the same, so to speak. Take all losses, add them up, and subtract them from the gross wins. If the total is negative, the player lost money, and the backer takes the loss (the player breaks even financially). If there's a net profit, split it according to the deal. The player should never make a profit while the backer is taking a loss.

Later, Greg Raymer (FossilMan)

[lorinda]

I am often the backee (or whatever the word is for the player) and although in a winning tourney the buyin is subtracted first, if it is a $750 buyin and I reach the level of $750 payouts I tend to take home $75 for my time and effort.
This safeguards the backer against the player going crazy because the bubble is worthless otherwise.(Not that I would, but the safety net is there) Also, when I have had monster results, I have tended to get over my allocated % because the backer(s) are often so delighted with a big hit that they give an extra drink.
Winning early on in festival week, I have been asked before to give up a small ammount of my winnings to help pay towards the main event.
Basically, know your deal inside and out and NEVER, EVER, _ask_ for any more. Backers have to earn a living too, and having a long term backer is a great reward for honesty.