PCA 2013: Daniel Negreanu and Jason Somerville on staking
For the next four mornings in the PCA Players Lounge PokerStars institution Lee Jones will hosting Q&A sessions with some of the brightest minds in the game. All four line-ups look good on paper but it's going to be hard to top Daniel Negreanu and Jason Somerville's performance which played out this morning.
Sit back now and take in some of the highlights and in the days to come we'll post up a near-full length video of the 30-minute session. You'll have to supply your own coffee, pastries and bagels though, whereas if you turn up in person at 11am to the Players Lounge here at the PCA we'll give you breakfast for free.
7 January: Staking and the poker economy (Jason Somerville and Daniel Negreanu)
8 January: Transition from Holdem to Mixed Games (Barry Greenstein and Vanessa Selbst)
9 January: Open-Face Chinese Poker (Jason Mercier and Shaun Deeb)
10 January: Life on the circuit (Liv Boeree and Lex Veldhuis)
As mentioned, we'll be posting up videos of each Q&A - with today's being particularly must-watch chunky - but if you get a chance you really should turn up in person.
After an introduction from Mr PCA Lee Jones, Negreanu and Somerville explained the basics of staking today.
"The more traditional way it's always been done is to say, 'I know he's a good player, he doesn't necessarily have the funds to play the whole tour.. you play all the events, I put up all the money and we do a 50-50 split of the profits (after make-up),' said Negreanu.
"In the past three years it's moved from that to more piece buying and even buying and make-up in short term deals where you might do 10 sessions and then chop the profit or wipe out the make-up. It was something that Sauce (Ben Sulsky) developed on 2+2," said Somerville.
Does that make sense? Well, it would if you understand what make-up means.
What is make-up?
Negreanu took the lead on explaining make-up; "I generally use this approach. Imagine that I'm staking you. We now have a stake deal. The first event you play is a $10,000 event and you don't cash, so we're -$10,000. Then you play a $5,000 and don't cash so I'm getting more and more annoyed that you keep missing, but we do another $10,000. Now you've played three events and we're stuck $25,000," said Negreanu.
"No, Daniel, you're stuck $25,000," chipped in Jones.
"Yes! I'm stuck $25,000 but you're in $25,000 make-up. In the next event you play a $1,000 buy-in and you win $5,000. Well, you don't get anything because you're not ahead, you're now stuck $20,000. Essentially in a deal like this both the backer and the horse are both going to be stuck or both going to be winning. In the new way it's done there's a possibility for the backer to lose money and the player to win money."
How staking deals end depends on personal agreements, sometimes it can involve repayment of a percentage of the make-up, frequently the slate is wiped clean and the horse is let off the hook. Negreanu for one likes to be in the driving seat; "I don't let players quit me. If you've got me stuck $200,000 and say, 'Yeah, I don't want to play for you anymore, I want to play for this guy,' I would be like, 'Huh, that's really shady.' That's really not fair."
The change from the old skool stable of staking is shifting to a more short term style for good reason. If someone is stuck $250,000 and is now playing a tournament with a $50,000 first prize then motivation could be lacking. "A lot of times with players who are too buried is that they don't play nearly as well," explained Negreanu.
"They start to fall apart and become despondent and it can create a really uncomfortable place if you're friends. I had a guy that I staked who was in for $300,000 and he was telling me about this hand. 'Yeah, I was short stacked and I didn't want to come back from dinner with a short stack.' I was thinking, 'Well, thanks!' You can do what you want with your own money but when you're playing for me I expect you to play every hand as best you can."
But changes are taking place in the modern world. It's not always the long game any more.
"In a sense a make-up deal is like a marriage, you're in a contract for a long time whereas doing one-time deals is a lot more like a one night stand. If you'd like to hook up next weekend, we'll discuss it!" said Negreanu, to much laughter.
Somerville did well to turn attention back to the topic in hand: staking, rather than infidelity.
"You can definitely make a lot of money in backing if you're really good in accounting, really smart with who you're staking, picking guys that are loyal to them. Actually, accounting is probably the toughest thing is staking... especially because we're so lazy, you know," said Somerville.
Keeping on top of your investments is importnant, said Negreanu who told of a story where a guy used to oversell himself, then arrange a swap with someone at the table, dump his chips to them and go home with a guaranteed profit and a nice sweat. That's not someone that you want to back.
"That still happens now," pointed out Somerville. "They'll be a guy deep in make-up who will say that they're playing some $2,000 event but their name won't even be on the registration list. At that point you have to drop them."
"I've got a good Eskimo Clark story," replied Negreanu, not to be outdone. "He was at the World Series and down to three-handed. Some guy sweating him says, 'Hey, you got a piece of Eskimo?' 'Yeah, I've got a third.' 'Oh really? I got a third too.' And the guy behind them says, 'Wait a minute, I got half!' It's the most ridiculous thing ever. He oversold and somehow still managed to make the final table."
Other session highlights
Final tabling players you've got swaps and chops with
Reasons to stake
Contracts or verbal agreements
Prices of mark-up
Expectation and return for investors
Why do horses need backing
Staking as business
We also caught up with Somerville after the session to give you some advice about lower stakes backing on a smaller bankroll.
"I would say most importantly that you really need to vet the guys you're staking. Look at their online results and their live results. There are guys selling packages to $100 tournaments. Have they paid out before? Are they going to play what they say? Are they going to pay you if they win? And are they going to possibly win? I'd say that they are the three important metrics to consider.
"If I could go back to my younger self and say 'Do this' I would say 'Believe in yourself more than others.' There were so many times that I would buy pieces of others in events and then have to sell parts of myself because I couldn't afford it and the people I'd bought would be out in two hours. I'd say that if you're on a limited bankroll and you're a proven winner then just stick to yourself, but it's all about the deals that are being offered. It's all about evaluating your player and if they're a good spot then they're a good spot."
It's sound advice. Follow it and follow the @PokerStarsBlog Twitter account while you're at it. Click through to see live coverage of the $100,000 Super High Roller and jump through to the PCA Main Event here.
Rick Dacey is a staff writer for the PokerStars Blog.