PSL franchises suffer big losses in opening two seasons

KARACHI: On the surface, the Pakistan Super League (PSL) comes across as a win-win event for all stake-holdders. But ask the franchises and they will tell you a different story.

According to Cricinfo, the PSL franchises incurred losses ranging from Rs 200 million to 700 million each in the first two seasons of the league - losses that have led the teams to seek a financial restructuring of the league as well as tax exemptions from the Pakistan government.

Cricinfo has obtained a copy of a letter that was sent by the PCB to the finance minister of Punjab, which includes consolidated financial details of the five franchises from the 2016 and 2017 seasons.

This is the letter that the PCB had erroneously sent to all franchises, inadvertently revealing the financial details of each franchise to the others, a slip-up that the PCB chairman Ehsan Mani had to apologise for.

Over the last couple of seasons, franchises have raised concerns over the amount of tax they have had to pay on top of their franchise fees and other operational expenses, all contributing to the losses they are incurring. According to the letter, Lahore Qalandars - the least successful franchise on the field, having finished last each season - have incurred the largest losses: PKR 312,744,021 in 2016 and PKR 420,914,836 in 2017.

Quetta Gladiators, the lowest-priced franchise when the league was launched, have incurred the smallest losses: PKR 46,530,560 in the opening season and PKR 63,518,476 in 2017. Quetta are among the more successful franchises, having finished runners-up twice in three seasons.

Karachi Kings, the most expensive franchise when the league was launched, incurred losses of PRK 117,028,811 in 2016 and PKR 60,846,776 in 2017. Islamabad United, the current champions, twice winners and the league’s most successful franchise, lost PKR 184,148,300 and PKR 241,981,640 in 2016 and 2017 respectively. The 2017 champions Peshawar Zalmi made a loss of PKR 237,233,858 in the opening season but reduced that ten-fold to PKR 20,152,767 in their winning season.

The figures may seem eye-opening but the fact that the league is mostly played in the UAE, where logistics and operational costs are much higher and sponsorship cannot be leveraged as it might have had it been played in Pakistan, are a big factor. Additionally, the first set of broadcast and commercial rights deals (signed for the first three seasons) were relatively lower - the new broadcast deal, for example, is 358% higher than the first one - and that has affected the revenue each franchise receives from the central pool.

The PCB makes the case that once the league moves back to Pakistan properly - they are planning to play eight games in Pakistan this season - then not only will the franchises be able to move towards breaking even (because of lower costs), but it will also generate “higher economic activity in the country”. —with inputs from agencies