Ok, the title of this article is the first line of a Duran Duran song, the one whose chorus goes: New moon on Monday and a firedance through the nightI stayed the cold day with a lonely satellite Ok, I like Duran Duran. Shoot me if you must. Here's the promised strategy article about satellite tournaments. Never mind that it comes right on the tail of my latest post about profitability. I've got the writing bug tonight, and once that dam's broke there ain't nothin' to do about it but let the words flow. So, what I'm gonna do here is go through a mathematical exercise that will elucidate some things about the economics of tournament poker. This is something that anyone wanting to take this game seriously needs to realize sooner rather than later. Here's the situation. Suppose Bob has a $10,000 bankroll for tournament play, and wants to take shots at a $500 tournament that usually seats 300 players. The vig for the tournament is $30. The average prize pool is 150,000. The payout structure for the tournament is as follows: 1: $375002: $240003: $180004: $120005: $105006: $90007: $75008: $60009: $450010: $300011-20: $120021-30: $600 We will assume that Bob makes it into the money 15% of the time, and when he does make it to the money, he finishes evenly along the spectrum. For example, the 15% of the time he makes it to the money, he'll take first place 1 time out of 30 on average, second place one time out of 30, etc.. Fully a third of the time Bob moneys, he's barely getting any money back! Pay attention, this gets important later. First thing to do is figure out what Bob's average payout is. To do that, let's figure out his average payout once he's in the money, then multiply that by the chance he has of making the money. It shouldn't be surprising that the average payout will be $5,000, which is the $150,000 prize pool divided by the number of places paid. Sure, he'll get the low-end $600 or $1200 wins very frequently, but those occasional final table finishes will knock his income out of the park. When we multiply the average $5,000 in-the-money payout by the 15% chance Bob has of making it to the money, we see that Bob makes $750 on average for every $530 ($500 buyin and $30 vigorish) he invests in tournament play. He is clearly profitable, but the dollar amounts aren't staggering. Poker is a game of small edges. That's just the way it is. Anyone can come along and hit the poker lottery by winning a multimillion dollar prize in the World Series of Poker Main Event. For the typical pro who "grinds it out", the occasional big finish, added to all the little finishes, averaged over the total games played, equals a tidy profit but definitely not a Forbes 500 level of incoming wealth. Now, back to Bob. Suppose each tournament takes him 2.5 hours on average to play out. (When he gets in the money, they take longer; when he does not, they are shorter for him. Obviously.) His profit per tournament is $220, meaning he's pulling down $88/hr. If he used his entire $10,000 roll playing this tournament, he'd play it 18 times and have $460 left over. Those 18 times would on average pay him a total of $13,500 in winnings. His ending bankroll would be $13,960. That's not bad for 45 hours of work. Now, as I mentioned before, I'm into satellites lately. Here's why: Suppose Bob's $500+30 tournament has a $53+5 satellite that 100 people on average play. This satellite pays the top 10% of the field a buyin to the big tournament. Now, because the payout is flat, Bob can play to "squeak" into the money. He doesn't have to worry about his stack size once he reaches the payout, because in this tournament 1st is equally as good as 10th. Because of this, Bob can get in the money more often than with an escalating payout tournament. Also, the skill of the opposition in these satellites is much lower than in the bigger tournament, giving Bob an even bigger edge. On the other hand, the satellite is designed to play faster, and forces all players to take more risks. The duration of the satellite tournament is further reduced because of the fact that it ends once play is down to the top 10% of the field, because at that point everyone gets the same payout and there's no need to play down to a single winner. The satellite takes, on average, 45 minutes for Bob to play. So, with his "survival skill" benefit, and a weaker field, Bob moneys in this tournament 25% of the time. Now, suppose Bob spent $10,000 on satellites instead. In this case, he would play 172 of them, and have $24 left over. Those 172 satellites, taking a total of 129 hours to play, earn him 43 entries into the big tournament. The total value of those tournament entries is $22790, for a profit in the neighborhood of $12,750. So, Bob's hourly rate for the satellites, then, is about $99/hr, more than his hourly rate for the big tournament!! Obviously, Bob still has to play the big tournament to realize any cash out of the buyins he won, so his overall hourly rate falls between the big tourney $88 rate and the satellite tourney $99 rate. So, if you're an aspiring tournament poker player, I suggest you really take satellites seriously: They have cheaper buy-ins, meaning you get less frustrated from losing out of them. And, remember, you're going to lose out of the vast majority of tournaments you play! Satellites have easier competition, and don't take as long to play. This allows you to get some good experience against weaker opponents on the cheap. Plus, you don't have to stay focused as long in order to win one, which is a good thing for someone just starting out. When you win a satellite and then money in the bigger satellite, your parlay for those two tournaments looks extra nice. By this I mean, paying $530 and finishing barely in the money for a $600 payout isn't really all that sweet of a victory. But paying $58 for a satellite, winning that, then making it barely into the money for a $600 payout is very sweet indeed. The first way, you win $70. The satellite way, you win back 10 times your buyin, for a 9:1 profit.

Source: Poker