Bigger share in central pool for PSL franchises proves costly for PCB

The audit report released by the Auditor General of Pakistan has raised a multitude of concerns surrounding the financial transactions of the Pakistan Cricket Board (PCB), prompting the recommendation for a thorough investigation into these matters. As per the audit report acquired by a representative from Cricket Pakistan, a significant controversy revolves around the profit-sharing arrangement related to the central pool of revenue generated by the Pakistan Super League (PSL). The report discloses that the PCB incurred a substantial loss of 1,637,977 million rupees due to an increase in the share of PSL franchises in the central pool. It should be noted that any alterations to the existing agreement could only have been made after the completion of the 10-year term in 2025.

The fifth edition of the PSL saw the allocation of media rights favoring franchises with an 80% share, leaving 20% for the PCB. Similarly, sponsorship rights were divided with 40% going to franchises and 60% to the board. In the case of ticket sales, 90% went to franchises, and only 10% went to the PCB, resulting in PCB missing out on potential revenue of 810 million rupees. This financial setback increased to 827 million rupees in the sixth edition of the PSL, and the audit report forecasts a substantial potential loss of 10,751 million rupees for the board from the seventh to the twentieth edition if the profit-sharing continues to favor franchises.

The audit report also highlights that expenses related to the last 20 matches of PSL 6 held in the UAE due to COVID led to an increase in costs, reaching 178 million rupees. These costs included travel, accommodation, match fees for foreign players, and daily allowances. Notably, extra production expenses amounted to 2.423 million dollars (545.175 million rupees at the rate of 225 rupees per dollar). The audit points out that, according to the contract, this amount was supposed to be paid by the franchises, but the board ended up covering the costs, prompting the need for further investigation.

Furthermore, the audit report points out the failure to obtain bank guarantees from franchises, suggesting that this lapse should be investigated. In the fifth edition, not securing bank guarantees put 3,293 million rupees of PSL income at risk. The total due amounts, comprising franchise fees of 2,170,476,000 rupees and other expenses of 1,122,764,806 rupees, sum up to 3,293,240,806 rupees, which could have been safeguarded with the acquisition of bank guarantees.

Another significant revelation from the audit is that income tax was not deducted from the prize money awarded to match-winner players in the fifth and sixth editions. This resulted in a loss of 31,990 million rupees to the national treasury, as players received cash prizes without adhering to legal regulations.