Revenue of franchises has decreased due to the lack of agreement over financial model
The Pakistan Cricket Board (PCB) and the Pakistan Super League (PSL) franchises are at odds over revenue sharing for season five.
According to sources, the financial accounts that were prepared last year, for the initial 30 matches, showed a revenue of around Rs.250 million for each of the franchises. However, due to lack of written agreement on revised financial model, the share has now been reduced to around Rs.200 million.
The revenue from playoffs matches is likely to be around Rs.7.4 million, while some of the money is on hold due to disagreements with commercial partners.
PCB has told the franchises, after consulting the governing board, that that old revenue sharing ratios will be used until the revised financial model is agreed upon. It must be noted that, during the 2019 PSL governing council meeting, there was only verbal agreement on the new revenue-sharing ratios. Later, the relationship between the PCB and franchises turned sour and the latter also went to court inorder to address grievances over the financial model. However, soon after, an out-of-court settlement was agreed between the two parties.
PCB Chairman Ehsan Mani, few weeks back, had also stated that the franchises should accept the revised model or else the old version will be used for future dealings.
According to the proposed financial model, the dollar exchange rate will be fixed at December 31, 2020’s rate of 138 for the next 14 years. This is the main issue for the franchises as presently the current exchange rate is being used rather than being fixed.
Meanwhile, the process of yearly franchise fee will be maintained until the central income pool, after subtracting expenses, yields Rs.7 billion or the league reaches its 20th season — whichever happens first. During that time 92.5 per cent of revenue will be given to franchises while the rest will be taken by PCB.
After the aforementioned period, PCB will not take franchise fee for the next 30 years but the revenue sharing ratio will be 70 to 30 per cent in the franchises’ favour.
PCB has also made it clear that the new financial model, after being agreed, will be implemented from the seventh edition of the league.
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