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How does the PSL work financially?

How does the PSL work financially?

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The most-awaited time of the year for cricket enthusiasts in Pakistan- the HBL Pakistan Super League is set to begin. HBL PSL 2020 holds even more significance, as it is being completely held in various stadiums of the country. While the hype is at an ever increasing high, there is something even more interesting about the PSL – and those are the numbers behind it. 

How much money does PSL make through sponsorship?

In the first year of  HBL PSL, only three out of five franchises made profits. According to an estimate, Pakistan Cricket Board earns around Rs 2.5 billion revenue per year through its mega event. Around 60 percent of the PSL’s revenue is generated from sponsorships. Out of that, around 70 percent is reserved for the Pakistan Cricket Board and 30 percent is distributed among the six franchises. Hence each franchise gets 5 percent out of that sponsorship revenue.

In addition to that, every franchise has its own set of sponsors which play a huge role in yielding revenue for the owners. These sponsorships have proven to be the reason behind the survival of a franchise. And in turn, the ability of franchises to earn sponsorships is dependent upon the league performance as well as the talent they have. That’s not all, the locations they play in also adds a role in getting sponsors. 

Every PSL franchise sells its merchandise that includes T-shirts, caps, wrist bands etc, which generates income. Roughly 10 percent of their revenue is earned through ticket sales, which is another major contributor.

The commercial rights to the initial five franchises were sold for $93 million (USD) for a tenure of 10 years in December 2015. In 2017, the market price of PSL was up to $300 million. And after the inaugural edition of HBL PSL, PCB officially announced that it earned profits of $2.6 million.

What role does HBL play?

The PSL’s initial title sponsorship was awarded to Habib Bank Limited Pakistan in December 2015, for a span of three years. The sponsorship deals related to the league including the title sponsorship, are estimated to have worth more than $6 million. HBL later renewed its sponsorship for three more years – their current deal is set to expire in 2021.

Which franchise is the most expensive?

Pakistan Cricket Board sold PSL’s sixth franchise – the Multan Sultans – in 2018 to Schon Group for $ 5.2 million per year, for a tenure of eight years. The interesting fact is that Multan franchise is valued at three times more than the average price of the other five franchises. Just after its first season at HBL PSL, it went in default with PCB, and was taken over by the authority. Later, the Multan Sultans franchise was auctioned again with a reserved price of $5.21 million per year, for a period of seven years. The franchise has been under Ali Tareen for two seasons, who as an owner, is seen to be a major contributor into Pakistan cricket.

Who has the official broadcasting rights?

For the first three seasons of the HBL PSL, Sunset + Vine were awarded the official broadcasting rights, and PTV Sports, Ten Sports and Geo Super were given the broadcast rights in Pakistan. The global television rights were sold to Tech Front, which is a UAE based group.

2019 was a year of profit earning for franchises 

It was 2019, when HBL Pakistan Super League franchises made profit for the first time in four seasons of the event. The franchises that earned profit include HBL PSL 2019 winners Quetta Gladiators, along with two-time winners Islamabad United and 2017 champions Peshawar Zalmi. The basic reason behind the profit earning were the new broadcasting and title sponsorship deals, that generated an income of $2.2 million in the central pool, that was distributed among the teams. PCB further generated revenue when eight matches of the PSL 2019 were held in Pakistan. 

Who has the advertising rights?

A Pakistan-based company, Blitz Advertising was granted the advertising rights for the first three years of the league’s operation. 

Agreement with SNTV

For the fifth edition of HBL PSL, the Pakistan Cricket Board and Sports News Television (SNTV) signed an agreement which will provide news broadcasters around the world access to match highlights of Pakistan’s mega-event. SNTV’s network will also have access to coverage of all press conferences.

PCB announced that the total prize money for PSL 2020 will be $1 million. 

The winning team will be awarded $500,000, while the runner-up will receive an amount of $200,000. Every ‘Player of the Match’ award winner will get a cheque of $4,500. On top of all that amount, $80,000 will be equally distributed among the ‘Player of the Tournament’, ‘Best Batsman’, ‘Best Bowler’ and ‘Spirit of Cricket’ awards winners.

The flip side: loss to local businesses 

According to the Lahore Chamber of Commerce and Industry, the HBL PSL matches in Lahore are estimated to cause Rs. 23 billion loss per day to the local businesses. As a result of strict security measures, the closure of Liberty Market and other surrounding commercial areas is going to negatively impact trade. Since there are fourteen games being played in Gaddafi Stadium Lahore, the total loss is estimated to be up to Rs. 322 billion, which is translated to be a huge loss in terms of a developing economy like Pakistan. 

Addressing a press conference, the President LCCI said, “We are not against cricket matches as these activities are very encouraging and help in improving the image of our country.” 

In order to deal with this threat to the economy, he further said, “We are frequently in contact with the government and we are also putting the proposals to the government to make a long term strategy to help the business community and locals.” “A luxurious hotel should be built as soon as possible within the premises of Gaddafi Stadium for the guest cricket teams because it is the only solution to address all the concerns,” he further added.

HBL PSL is the major contributor in bringing international cricket back to Pakistan but on the other hand, the local business community is going to bear an immense loss this year, due to security strictness. In order to keep the situation smooth, the government needs to finalise a long term policy which will enable Pakistan to host international cricket without harming local businesses.

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