Sethi eyes HBL PSL expansion with two new teams. But where does that leave existing franchises?

LAHORE: De-facto chairman of the Pakistan Cricket Board (PCB) Najam Sethi has said that he is planning on adding two more teams to the HBL Pakistan Super League (PSL) in a bid to try and further grow the tournament. 

Speaking to Profit, Sethi said that interest in the tournament was at an all time high and that the board was looking to utilise Peshawar, Quetta, and Faisalabad — all cities where there are international standard stadiums available. However, it is worth noting that the plan to introduce new teams into the HBL PSL has been met unfavourably by the owners of the existing franchises that are worried about sharing their profits. Sethi’s plan, while good for the HBL PSL in the long-run, threatens to disturb the hard-fought tacit truce that currently exists between the board and the franchise owners. 

“I want to add two more teams. The franchises think this will cut into their profits. I disagree and will explain how it will be a win-win for all. We will bring Peshawar and Quetta/Faisalabad into the loop,” he told Profit. Sethi had also mentioned bringing more teams into the fold at the start of this year’s tournament. 

“There is immense pressure to increase the number of teams in PSL, but unfortunately Ehsan Mani and Ramiz Raja made an agreement with the franchises that only six teams will play in the next two years. We have to convince the franchises to include two more teams. No one will lose anything, and if a franchise suffers a loss, the PCB will take responsibility,” he told the media back in February.   

The financial model troubles

The HBL PSL follows a financial model where there is a central revenue pool where the tournament’s earnings from broadcasting, sponsorship, etc are accumulated. For the first few years of the tournament, the PCB would take 20% of this revenue pool while the remaining 80% would be split equally between the remaining franchises. 

This system was renegotiated back in 2019 after the introduction of a new franchise to the tournament — the Multan Sultans. Under former chairman of the board Ramiz Raja, it was decided that the PCB would now take a 5% cut from the central revenue pool while the franchises would split the remaining 95% equally. 

However, the main source of revenue for the PCB is yearly franchise fees. Overall, the teams pay the PCB around $15.65 million a year to keep the rights to the franchises. Since different teams pay different fees depending on the value of their city, there is a clear difference in how much money they are making. For example, if Quetta is only paying $1.1 million a year and Karachi is paying $2.6 million a year but the overall revenue is being divided equally between all the teams then the smaller teams are better off.  

While the new 95-5 model was not perfect, it did manage to allay the concerns of a number of franchise owners. However, if more teams are introduced while that will result in more games and more revenue it will also mean the central revenue pool will be further depleted. 

Read more: Is the PSL good business? For the PCB, yes. For the teams, not so much

Another shakeup? 

Earlier this week, Profit had reported that a number of franchise owners were demanding that the HBL PSL’s financial model be changed to a regional revenue model. This would mean that each team would invest in their respective region and also make money from that region. For example, under this model the Lahore Qalandars would take the revenue for all home games played at Gadaffi stadium — this would include broadcasting revenue, gate receipts, and sponsorship. They would then go and play away games as well where the host team would earn money. 

Read more: The HBLPSL is here to stay. But how high can it go?

“There needs to be a serious conversation that actually addresses the league model problem” says Atif Rana, owner of the Lahore Qalandars. His team has been on the forefront of the effort to promote a regional revenue league model. “If we manage to get this system in place there is no league in the world that we cannot compete with.” 

“Over the years as the security situation has improved and the tournament has spread all over Pakistan this was all bound to happen. However, there are still some issues,” says Osman Sammiuddin, senior editor at ESPN Cricinfo. For starters, the security situation is changing again before our very eyes. Then again, what are you going to do about a team like Quetta? You’re definitely not going to be playing there for a very long time or hosting international players. Do Quetta and Karachi then share the revenue for National Stadium? Will Salman Iqbal agree to that? These are all problems that need to be thought about.”

“These are all problems that need to be thought about. All in all, it is a good way to run the league but it will be a while before that happens. The PCB is an old institution that does not like to cede control; they have a very purani sarkari soch. With Sethi in charge, he may feel even more strongly about this since he has been here from the beginning.”

However, Sammiuddin agrees that there need to be more teams in the tournament. “You’re a nation of 220 million people. You had the QEA trophy where Imran Khan forced the six team system to become a thing, and you want quality, but you need way more teams. And in the PSL especially you need more competition and more liveliness. And commercially I don’t think it should be an issue to sell the rights to a team for a city like say Faisalabad. There should ideally be two more teams coming in.”

Digital rights 

Meanwhile, commenting further on how he was planning to expand the PSL, Sethi said that the future of the tournament was going to be deeply linked with how the digital broadcasting rights would be managed. “The Sale of Digital rights is the future model for financial growth. We are on it. If DTH comes to Pakistan, PSL will fly. If we are able to play some matches in the USA, it would be a great leap for cricket,” he says. 

“Previous regimes had the wrong perspective. They thought that for psl to be successful, foreign players had to play before domestic audiences in local stadiums. But that wasn’t possible because foreign players were not ready to come to Pakistan. But i reasoned that tv and digital eyeballs mattered not full house in local stadiums. Global Broadcast rights brought in money not gate receipts. So I launched psl in dubai and it was a huge financial success, paving the way for it to be gradually branded as a Pakistani product which brought international cricket back to Pakistan.” 

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