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PCB, PSL to settle financial dispute out of court

The PCB agreed to meet with the PSL owners on October 7 to try and resolve their long-standing issues

Umar Farooq
Umar Farooq
The franchises say that while the PSL has made the PCB richer, they have incurred losses each season  •  AFP via Getty Images

The franchises say that while the PSL has made the PCB richer, they have incurred losses each season  •  AFP via Getty Images

The PCB and six PSL franchises have agreed to settle their outstanding issues related to the league's financial model out of court. The legal suit has thus been disposed of by the Lahore High Court. Both parties will meet on October 7 in Lahore to try and find a resolution.
Last week, the six franchises had collectively filed a writ petition in a bid to force the PCB to change the financial model, a long-running demand from the franchises. Their central grievance is that the PSL has apparently made the PCB richer while the franchises have run losses every season. The petition asks the court to direct the PCB to "formally redress the grievances of all franchises" and "revise the model of PSL in accordance with its statutory mandate and make it financially viable".
The PCB had been offering to rework the model and had several meetings over the years on the matter with various suggestions put forward, but little definitive action has resulted from these discussions. The lawyers for the franchises argued in the court that "the existing structure and arrangement are inherently inequitable and the said inequity of the model needs to be removed".
It was further argued by the franchises that, in the wake of Covid-19, discussions around restructuring the model had been deferred further by the board. It was argued that the "PCB has a statutory duty under the Sports Ordinance 1962 to promote and develop the sports and all its measures should be in conformity to the said purpose including the franchise arrangements and other structures. Franchise owners are continuously suffering losses under the present model and they cannot continue like this."
The drastic escalation, to take the matter to the courts, began after years of apparent frustration for the franchises. The model of revenue distribution was a contentious issue almost from the outset. The franchises have a number of demands, from wanting tax exemptions, to better distribution of gate money, to more favourable exchange rate terms.
Five out of six franchises have ten years' rights for their respective team and after five years in business, no franchise has broken even in the first four full seasons of the league. Multan Sultans, the most expensive team - they were bought for USD 6.35 million in 2018 - have ownership rights for seven years. The PSL was played with five teams for the first three seasons and when Multan Sultans entered the fray, it resulted in a dilution of payments to each club from the central pool that the PCB has set up for revenue.
Justice Sajid Mehmood Sethi, who was hearing the petition, questioned PCB lawyer Tafazzul Rizvi asking why "they do not sit with the PSL owners and address their genuine grievances". The court adjourned the case following PCB representative Salman Naseer stating the board was prepared to invite the PSL owners on October 7 to begin the process of redressing their grievances.
"It was sad that the matter was taken to the courts," Salman Naseer later said in a statement. The PCB has always tried to sit down and amicably resolve such issues. The coverage that this case has received has damaged both the PCB and the PSL globally. We have always tried to sit down and talk to the franchises. That was true before the case and will remain so after it, too. We have invited the franchises to meet on October 7 and discuss the matter in good faith to resolve these difference. We have also extended an offer not to take any adverse action against them until 9 October. In return, they have promised us that they will immediately pay us whatever they owe from 2019 and 2020."
*This story was amended at 1420 GMT on October 2 to reflect the views of PCB lawyer Salman Naseer

Umar Farooq is ESPNcricinfo's Pakistan correspondent