Franchises believe the current revenue and distribution model is preventing the league from thriving
Ramiz Raja, the president of PCB, is keen to explore the idea of introducing an auction for the Pakistani Super League, instead of the project the league is currently using, with the aim of strengthening and developing the league.
Ramiz wants franchises to be able to choose players for longer-term contracts with higher pay and, according to ESPNcricinfo, the ideas were well received among franchises after a meeting between them this weekend. But the long-standing standoff between the board and franchises on the league’s financial model stands in the way of those changes.
Ramiz has met with the franchises for general discussions about the league and while his ideas have been described as ambitious, the obstacle to their implementation remains the current model of distributing finance and income for the league, which according to franchises, prevents them and the league from thriving. With the league now having six seasons, four of the six franchises, it is believed, have yet to break even on their investments.
Franchises have long felt the current model is flawed in the sense that while the PCB has made money with the league, most franchises haven’t. The six teams receive an equal share of a central revenue pool each season (which comes from broadcast rights and league trade deals). Annual franchise fees range from $ 1.1 million to $ 6.35 million (PKR 18.6 crore to PKR 107 crore), and the board earns $ 15.65 million (PKR 264 crore) each season from that. , and also takes 15% of the stream broadcast income.
For comparison, in the IPL, the original eight franchises paid royalties over a ten-year period, beyond which they do not have to pay an annual royalty. In the Caribbean Premier League, franchises have had rights for 25 years. PSL franchises, on the other hand, have a ten-year contract. The PSL franchises also cover the production costs of the broadcasts each year, while the PCB covers the costs of the field and match officials.
Things came to a head last year when franchises sued PCB over the matter. This happened shortly after the PCB became embroiled in legal disputes with the league’s broadcast rights holder.
The Lahore High Court, however, asked the PCB to work with the franchises and resolve their issues amicably. After a series of meetings with the franchises, then PCB chairman Ehsan Mani hired former Pakistan chief justice Tassaduq Hussain Jillani to a one-man independent panel to recommend a solution. The judge submitted this report earlier this month, although the PCB did not share it with the franchises, citing it as a confidential document.
The PCB’s reluctance on the report so far stems from their fears about the legal implications of a change in the league model and the agreements on which the league was formed. PCB officials are believed to be concerned that any change in the league’s model will attract the attention of state financial supervisory and regulatory authorities such as the National Accountability Bureau (NAB), the Public Account Committee ( PAC) and the Auditor General of Pakistan.
Such agencies have, in the past, been involved in these issues. Former board chairman Najam Sethi, for example, was questioned by PAC for authorizing payments of $ 400,000 (PKR 6.76 crore) to each franchise in 2016 – payments intended to make up for losses suffered by franchises in the league’s first season. Pakistan’s Auditor General has also previously raised concerns about the low prices at which franchises were initially sold. Since the chairman of the board remains a political appointment in Pakistan – ultimately appointed by the prime minister – the concern is that every change of government will result in staff changes in key institutions (such as the NAB) , who are then deployed against prominent figures of the previous regime.
The other more recent source of tension between franchises and the board discussed at the meeting was the emergence of the Kashmir Premier League. Recently organized, the private league has relied on an almost full roster of players from Pakistan’s national circuit. Franchises felt that with a T20 National Cup already on the schedule, KPL was simply exploiting and cannibalizing the commercial space in which PSL – the board’s flagship event – operated.
Ramiz is due to meet with franchises again on Monday.
Umar Farooq is ESPNcricinfo Pakistan correspondent