New York gambit: how to make a match for the chess crown

GM Sergey Karjakin (Russia) and GM Magnus Carlsen (Norway) (left) in the eighth game of the match for the world title in 2016 in new York

Photo: Reuters/Pixstream

Match for the world championship between Sergey Karjakin and Magnus Carlsen is perceived as an event that may spur interest in chess. RBC says the organizer of the meeting and about how he’s going to earn at chess tournaments.

Who organized the match?

Organization of tournament contenders and championship matches has been the company Agon Limited, in 2012 became the exclusive partner of the International chess Federation (FIDE). It was founded by Andrew Paulson, also known as one of the co-founders of the media company SUP Media. Later, he sold for a symbolic Agon of money to his partner, 40-year-old native of Chelyabinsk Ilya Merenzon.

The President of the World Chess by Agon Limited Ilya Merenzon

Photo: Vladimir Vyatkin/RIA Novosti

Ilya Merenzon was born in 1976 in Chelyabinsk, graduated from Chelyabinsk state University on a speciality “History and sociology”. Received his MBA from Pace University in new York majoring in international business.

Agon, in fact, became a monopolist in the sphere of organization of major chess tournaments, and the company got it right by ten years with the right of subsequent prolongation for the same term.

“The first thing we did — it just tried to count how many people are in the audience. Ordered a large British research company YouGov. They found out how many people are playing and generally interested in chess in Russia, USA, India, Germany and England, and then used the data as a proxy for other chess countries such for today 204. At the moment, the chess audience of 600 million people. Those who play and at least know what is the name of the current champion of the world” (from an interview with Ilya Merenzon website

According to Maranzana, finally the company realized how big the commercial potential of chess, only after special studies, the results of which revealed that nearly one billion people worldwide use a mobile chess application, and the average age of people playing chess in recent years has dropped from 40 to 18 years.

Agon decided to maximize this potential audience interest and turned the match between Karjakin and Carlsen in a real interactive show.

Where is the match?

For holding the championship games, was chosen new York. “This celebrity, this is the tradition the Prime Minister, it is the tradition of the “red tracks”. And the level of love for chess with a number of well-known politicians, actors, singers, businessmen is so high that the opening of the match, I hope, will be an event I look kind premiere of chess in a new format during the Internet era,” — said Merenzon in interview to Agency “R-Sport”.

Front of the Fulton Market Building

Photo: Jason Kempin/Getty Images for Agon Limited/AFP

The place where the match is located in the South Street Seaport in the South of the lower East side, one of the most prestigious areas of the city. In the building of the Fulton Market Building specifically to meet Carlsen and Karjakin was organized not only hall, which played the party, but also built television studios, shops and restaurants. For invited guests and VIPs for the duration of the match was an open lounge area, which offers panoramic views of the Brooklyn bridge, the statue of Liberty and new York skyscrapers.

Tickets to the hall where I play players are divided into two price categories — regular cost $75, but selling them is long gone. The cost of tickets is a VIP class grew closer decisive match: one ticket for the party cost $600, on the tenth and eleventh party its price was already $900. Tickets for the decisive twelfth game in the sale there. Fans were offered another option — a package of tickets for all parties, except the first and the last, they cost from $350 to $3 thousand.

For the money the audience had full access to everything happening in the hall that highlights the match in new York from the previous championship games: the organizers of the games, for example, allowed the fans to leave it on their mobile phones, because both players during the games separated from the public by a soundproof glass partition.

Spectators at the match Carlsen and Karjakin

Photo: Reuters/Pixstream

How to sell online translation?

The hall in which the match Karjakin and Carlsen, holds only a few hundred spectators, therefore the main audience of this event going on the Internet. For them and website was created where anyone can pay for access to translations of batches in real time.

The minimum subscription price is $15 — for the money the user gets access to broadcasts of all 12 games of the match except for the tie-break, which will be played on November 30 in the case of a tie. Live match in progress not only in the usual way, with a variety of cameras located in the hall, but in virtual reality with a view to 360º. While the audience has the opportunity not only to discuss the progress of the party with each other, but to hear comments specially invited celebrities and in several languages.

More expensive packages have a cost to subscribers of $45 and $99. For the money you can get guaranteed access not only to all parties of the match Carlsen — Karjakin, but the games following championship cycle that will end in 2018. Premium package, among other things, includes a gift set, which includes t-shirts, collectible badges and virtual reality glasses for game viewing.

“After the 1940-ies of the chess is at the forefront of political confrontation during the cold war. The climax here — in 1972, the match Spassky and Fischer, one of the most popular sporting events of the century. The level of sponsorship, there was just going wild, as the level of public attention to the subject. In the 1980s, finally, the era of TV — chess didn’t get there because they do not have the necessary screen entertainment. But a few years ago they were in the online era. It happened recently, and we are on the move jumped into the wagon” (from an interview with Ilya Merenzon website

Watch the match like you can on the website and in specially-manufactured to match your application. The company makes every effort not only to make your online platform as the exclusive provider of information on progress in the championship match and thus make the most of it to monetize, but also offers to earn its partners to new subscribers on the model of revenue sharing. For every new member attracted by the built in widgets and promo codes, they are getting Commission by 10% of the cost of new subscriptions.

Sergey Karjakin, Sergey Karjakin studies the board during round 8 of the World Chess Championship against Magnus Carlsen, in New York, Monday, Nov. 21, 2016

Photo: AP Photo/Richard Drew

As a monetized service?

According to Maranzana, for the first eight days of the tournament on the website were issued more than 20 thousand subscriptions and about 15% of them were purchases of premium packages cost $45 and $99.

“This is a very high figure for a first attempt — the model is Pay Per View in chess, never used. Users very interested in such modern elements broadcast as virtual reality, the possibility of selecting the camera view, a new approach to comments”, — he said RBC.

Technologies that are used to organize the match in network cost the company a significant amount, however, the organizers of the match consider these costs as one-time investment in future projects. “The World Chess by Agon Ltd — rights (in the conduct of world championship matches — RBC.) for many years, so that part of the costs, such as investments in technology platform, the Studio, the model of Pay Per View, the broadcast of 360º, we have made long term and be able to use them in the next cycle of the world Championships,” says Merenzon.

In addition to the organization of broadcasts on the network, Agon is engaged in the sale of TV rights. Of greatest interest to the screening of the match Carlsen — Karjakin showed, of course, the Russian and the Norwegian TV crew. Thus, if in Russia the organization of broadcasts is engaged in the specialized sports media company “Match TV”, Norway’s rights were sold to the main state broadcaster NRK. “With them less than a year ago was concluded the largest transaction in the history of chess — and long-term contact of approximately $2 million,” said RBC Merenzon.

What are the costs of holding the match?

The total cost for the match amounted to about $7 million, said Berenson RBC. According to him, these expenses include prize Fund and FIDE regulatory fees, the cost of site and building, accommodation teams ‘ hotels, broadcast, security costs, organization of broadcasting and transport. The share of prize Fund and payout the international Federation will total about $2 million.

The size of the prize, who compete for Karjakin against Carlsen, far from a record in the history of championship matches — it is €1 million ($1.1 million). The winner of the match will receive 60% of this amount, and if the fate of the match will be decided in a series of additional blitz-parties, this percentage will fall to 55%.

According a record prize Fund of the championship was the match between Indian Viswanathan Anand and Veselin Topalov of Bulgaria in 2010 to $2.8 million, the minimum match of Tigran Petrosian and Boris Spassky in 1966 — only $2 thousand First championship match was held in 1886 in the United States, Wilhelm Steinitz and Johann Zukertort played £800 (according to online calculator with inflation currently that would be $114,5 million)

Grandmaster Magnus Carlsen in the eighth game of the match for the world title in 2016 in new York

Photo: Richard Drew/AP

What are the audience of the match and the income of the company?

Speaking about the size of the audience the championship match, Berenson says about 1 billion people — according to him, this is the number of people around the world “somehow collided with the lighting of the match”.

We are talking about broadcasts in Internet and television and print media. “The United States had no national newspaper, which would have covered the match on the first page. Also a huge lighting in Russia, Norway, Germany, Spain, France,” says Merenzon.

The total audience of those who are directly following this event in real time, approximately 55 million people. This result, according to him, consists of the data of the media partners of the organization and the number of views of online broadcasts.

“Audience chess comparable to the Facebook audience. Day the company and the sport in General has reached this level, the necessary investments that we hold, primarily, in technology, in marketing, in business development. The plans — offline adult entertainment clubs, corporate solutions and most importantly — the development of broadcast of chess. This is the perfect spot for the era of smartphones,” says Merenzon.

The head of Agon admits that, despite very active promotion in media and monetization of online broadcasts, more than half of the company’s revenues during the match, still have sponsorship contracts. On the development of relations with sponsors is a big bet, and the choice of venue in this case is absolutely not accidental.

“We have big plans for the development of the sponsoring unit, and for this we hold the match in new York — for us and for the sport it is, in fact, the presentation in its new, modern form,” says Merenzon.

To disclose the amount of income that the company expects to receive from the organization of the match Karjakin — Carlsen, Merendon did not. At this stage, apparently, the company is not the most important — it can afford to engage in investing in the project for promotion of chess competitions at the top level. Time she still has an agreement with FIDE, Agon assumes that the exclusive right to organize these tournaments belong to the company until 2022, after which it will be possible to extend the contract. At this point in Agon, apparently, will be to understand how successful was her idea to make money on chess.

With the participation of Alena Mahakavi

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