Daily Times

KARACHI: Pakistan Super League (PSL) franchises incurred losses ranging from Rs200 million to Rs700 million ($1.4 million to $5 million approx) 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. A letter was sent by the Pakistan Cricket Board (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: Rs312,744,021 in 2016 and Rs420,914,836 in 2017. Quetta Gladiators, the lowest-priced franchise when the league was launched, have incurred the smallest losses: Rs46,530,560 in the opening season and Rs63,518,476 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 Rs117,028,811 in 2016 and Rs60,846,776 in 2017. Islamabad United, the current champions, twice winners and the league’s most successful franchise, lost Rs184,148,300 and Rs241,981,640 in 2016 and 2017 respectively. The 2017 champions Peshawar Zalmi made a loss of Rs237,233,858 in the opening season but reduced that ten-fold to Rs20,152,767 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. One of the main concerns of the franchises is that the franchise fee they pay to the PCB every year is in US dollars — the value of the Pakistani rupee against the dollar has plummeted, however, over the last six months. The first owners of the Multan franchise, who pulled out after one season, cited the dollar fluctuation as one of the main reasons for their leaving. The Multan Sultans are believed to have made a loss of approximately Rs400 million in the one season they played in 2018. The other big concern is the taxes paid on the franchise fee. 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”. Until then, the PCB has asked the Punjab government to provide tax relief to the franchises, sponsors and rights holders for a period of five years.

Published in Daily Times, January 3^rd 2019