Thursday, 27 January 2011

A deleted post from

As requested, I'm reuploading a post made by Rationality last year, which got taken down a short time after.

An Intricacy in Malaysian Chess This Year

Well, apparently some people could not comprehend an example I gave about something fishy that happened in Malaysian chess, so I'll have to elaborate. Minus the sarcasm.

OK, I lied. Reading Chess Ninja's post just reminded me of something which I wanted to write about months ago, except that I didn't have the time and eventually forgot. So I want to elaborate on this regardless of whether you understood what I said or not.

Anyway, here's the story that I will start from:

This year, 2010, the First GM Academy had secured sponsorship from AirAsia, who will sponsor the air tickets (so we're told) to the ASEAN Age-Group tournament. This implies that one had to pay for everything else if they were interested, i.e. accommodation, entry fees, etc. However, there was a catch: You must attend a 3-day training program conducted by the First GM Academy, and pay for it. The cost? RM1000.

Later on at the last minute, participation to this training was opened to outsiders, i.e. people not playing in the ASEAN, at the cost of RM300.

We can draw up this argument:

It's agreeable the air ticket was a significantly expensive item: It would cost somewhere within the RM1000-1500 range, and having that taken off a package which normally costs around RM4000 would be like getting a 30% discount. But then, you have to pay an extra RM1000 anyway. Mathematically, that meant you'd be saving up to RM500 compared to not following FGM. And you can't possibly be paying more than you would. To the player, the better deal definitely lies in following FGM.

Now let me tell you what's wrong with this picture:

FGM got the air tickets sponsored for them. Yes, the players might see the better deal in going through FGM. However, remember that they were supposed to be saving somewhere between RM1000 and RM1500. But now, it's somewhere between nothing and RM500. Now, let me clarify that these numbers are only my rough estimates; their magnitudes don't matter. What matters is that there is a difference of RM1000 in what they were supposed to save, and what they really will be saving.

Well, there is no 12th dimensional portal for money to disappear through that I know of (OK, I promise, there will be no more sarcasm after this), so that RM1000 per person has to go somewhere. And that somewhere is into the First GM Academy's bank account.

Then after that, the program is opened to outsiders for RM300.

There are a few things wrong with this:

1. It shows that FGM is willing to run the program for RM300 per head. That means the people who had to pay RM1000 were victims of price discrimination. For those unfamiliar with the term, it meant FGM charged the ASEAN players RM1000 only because they were willing to pay that amount.

2. It dilutes the pool of students. It gives the coaches more people to focus on, and hence the students will not manage to receive as much training as they would, had there been a small number of students in the training session. This is non-negotiable. Training works better with less people. That's why there's a market for one-to-one tuition in everything. Perhaps training in small numbers can arguably be more effective than training a single one, but beyond that "small number" training loses its effectiveness. And this theory would only be applicable if the players are of the same standard. Would training a 2000 player together with 5 people who are just starting to learn how to capture en passant increase its effectiveness compared to training them separately? Of course not! And, the only time when having more people may have only a negligible effect on the benefit of whatever they're trying to enjoy is when that something is non-interactive, e.g. fireworks.

3. Can we take a step back? There are people paying RM1000 and RM300 for the exact same thing. How would you feel if you go to your local Mamak, and your Mee Goreng costs you RM10, and the guy sitting on the table next to you pays RM3 for the same thing?

Now, let's do some math. If I'm not mistaken, GM Ziaur trains for RM150, give or take, per 2-hour session. How long is the training under FGM? Let's say 8 hours times 3 days. RM150*8*3=RM3600. There are many things wrong with this figure. I will just stop at the fact that FGM received RM8000 from the ASEAN players alone, and let you figure out the rest.

Actually, this would all be fine if FGM themselves sponsored the air tickets. It's just business then. The problem is, this is not the case. It was sponsored by a third party. Let me illustrate with numbers. Assume that each ticket costs RM1500, and 8 were sponsored, and we're only looking at the players and not their parents. Each person had to pay RM1000 extra to First GM. What it is for is not important; it was a forced payment. Anyway, each person effectively saves RM500.

AirAsia sponsors RM12000
Players save RM4000

That missing RM8000 is the problem. When someone sponsors something, all of it should go to where it is meant to go. And AirAsia sponsored the tickets for the players. The players should be saving very close to RM12000. Any significant leakage of value on the way to them is due to corruption. And I find 66.7% to be a significant portion.

Whether or not the training managed to cover its expenses of hiring its coaches (it probably did, though), or that it had served a purpose or whatnot is irrelevant. At the end of the day, the players had to attend that training whether they liked it or not (i.e. they had no choice), and had RM8000 taken from them.

Now, I'm not exactly a lawyer (Yee Weng, you must be feeling safe now!), but technically what FGM did seems legal. They offered players the choice of going to ASEAN through them, despite them knowing the fact that they will siphon some of their money, which was cleverly placed in the form of "training" instead of "air ticket", so the players technically weren't paying for something that they should not be paying for. Call it a profit-making legal loophole, if you must. I still call it unethical, among other things.

The exact problem is that the costs were engineered so that the better deal still lay in FGM. Yes, players had the choice between going themselves and paying, say, RM4500 or through FGM and paying RM4000 only. Of course any sane person would pick FGM. However, FGM had exploited the sponsorship granted by AirAsia; they could still get an extra RM1000 from anyone who wanted to follow them.

I dare say that, had the cost of going been RM1000 cheaper as it should have been, there would have been a higher participation rate. Which means that the extra RM1000 charged by FGM has contradicted with a certain sub-goal of a certain academy: To get players to play in an international event.

I'm sorry. I just can't write about these donkey-obvious things without sarcasm.

1 comment:

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