A common way to play an event above your usual level is to have friends put up part of the entry, or to form a team and pool everyone's results. It lowers the swings each person carries, but it adds one thing to manage: how the money is divided. If that is not agreed beforehand, a dispute afterwards is close to certain.
The basic idea: shares
The simplest arrangement is to split in proportion to what each person put in. If an event costs $400 in total and you and a friend pay $200 each, you each take half of whatever comes back.
Each person's return = Total prize × Their share
"Total cost" here must include the fee and every re-entry. Agree at the outset whether a re-entry is funded again in the same proportions, or is the player's own decision and expense.
What markup is
The person playing contributes time and skill, so shares are sometimes sold above cost. The multiple is called markup.
Price of a share = Total cost × Share sold × Markup
For example, with a total cost of $400, the player sells 50% at a markup of 1.2:
- The backer pays: 400 × 50% × 1.2 = $240
- The player's own outlay: 400 − 240 = $160 (while keeping 50% of the action)
There is no standard markup. It is whatever both sides agree. No markup at all (1.0) is common between friends and entirely reasonable.
A full settlement example
Using the terms above (total cost $400, 50% sold, markup 1.2), here are two outcomes:
| Outcome | Backer (50%) | Player (50%) |
|---|---|---|
| Amount paid in | $240 | $160 |
| Case 1: $3,200 prize, each receives | $1,600 | $1,600 |
| Case 1: net result | +$1,360 | +$1,440 |
| Case 2: no cash, net result | −$240 | −$160 |
Teams: pooling results over time
Another common format is a team of players who total all costs and prizes over a period and divide the result by agreed shares. This smooths out individual swings: you may blank for a month while a teammate reaches a final table, and the team is still up.
Member's amount = (Team prizes − Team costs) × Member's share
Suppose four members hold 40%, 30%, 20% and 10%, and the team's costs for the month are $2,400:
| Member | Share | Team net +$4,000 | Team net −$800 |
|---|---|---|---|
| A | 40% | +$1,600 | −$320 |
| B | 30% | +$1,200 | −$240 |
| C | 20% | +$800 | −$160 |
| D | 10% | +$400 | −$80 |
Note that what is divided is the net result, not the prizes. Costs go back to whoever paid them first, and only the remainder is split by share. This is the point most often confused.
Six things to agree before anyone plays
- Shares: who holds what, adding up to 100%.
- What counts as cost: entries only, or travel and accommodation as team costs too?
- Re-entries: who decides, who pays, and how many at most.
- Settlement period: per event, monthly, or at the end of a series.
- Losses: absorbed by each member in that period, or carried forward and cleared before any profit is shared (often called makeup).
- Leaving early: how unsettled results are handled if someone wants out.
Tip: write those six points down and post them where everyone can see them. That is not distrust. It prevents everyone remembering a different version three months later.
Keeping the books in practice
The formula is rarely what goes wrong. Incomplete data is: someone forgets to report a re-entry, someone leaves out the fee, someone's prize has not been entered. A settlement nobody disputes needs three things:
- Each event's cost and prize recorded on the day.
- Every member looking at the same record rather than their own.
- The ability to trace every figure back to its source at settlement.
With few members and few events, a shared spreadsheet is enough. As both grow, manual reconciliation eats more and more time, and a tool that applies the shares automatically saves a great deal of trouble.
Mind the law
Staking and prize-sharing arrangements may be treated differently for legal and tax purposes depending on where you are. This guide covers the arithmetic only. Check that any arrangement complies with the rules where you live.
Try the matching tool: Team Profit Split Calculator: Work Out Each Member's Amount by Share