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PSL mulls move from drafts to auctions, but financial model poses hurdles

The franchises feel the current revenue and distribution model prevents the league from flourishing

Umar Farooq
Umar Farooq
Auction instead of draft? It could happen in the PSL.  •  AFP via Getty Images

Auction instead of draft? It could happen in the PSL.  •  AFP via Getty Images

Ramiz Raja, the PCB chairman, is keen on exploring the idea of introducing an auction to the Pakistan Super League, instead of the draft the league currently uses, in a bid to strengthen and grow the league.
Ramiz wants franchises to be able to pick players for longer-term contracts on higher pay and, ESPNcricinfo understands, the ideas were well-received among franchises after a meeting between them this weekend. But standing in the way of these changes is the long-standing impasse between the board and franchises over the league's financial model.
Ramiz met the franchises for general discussions about the league and though his ideas were said to be ambitious, the obstacle to their implementation remains the league's current financial and revenue distribution model, which franchises argue is preventing them and the league from flourishing. With the league now six seasons old, four out of the six franchises, it is believed, have yet to break-even on their investments.
Franchises have long felt the current model is skewed in that while the PCB has made money off the league, most franchises have not. All six teams get an equal share from a central revenue pool each season (which comes from the league's broadcast rights and commercial deals). The annual franchise fees range from between USD 1.1 million to USD 6.35 million (PKR 18.6 crore to PKR 107 crore), and the board makes USD 15.65 million (PKR 264 crore) every season from that, and also takes 15% from the broadcast revenue stream.
For comparison, in the IPL, the original eight franchises paid fees over a ten-year period, beyond which they don't have to pay any annual fee. In the Caribbean Premier League, the franchises have rights for 25 years. The PSL franchises, on the other hand, have a ten-year contract. The PSL franchises also bear the broadcast production costs every year, while the PCB covers the ground and match officials costs.
Matters came to a head last year when the franchises took the PCB to court over the issue. That came not long after the PCB had become entangled in legal disputes with the league's broadcast-rights holder.
The Lahore High Court, however, asked the PCB to work with franchises and settle their issues out of court. After a series of meetings with the franchises, then PCB chairman Ehsan Mani engaged a former Chief Justice of Pakistan, Tassaduq Hussain Jillani, on a one-man independent panel to recommend a solution. The judge submitted that report earlier this month, though the PCB has not shared that with the franchises, citing it as a confidential document.
The PCB's reticence on the report so far is understood to stem from their fears over the legal implications of a change in the model of the league and the agreements on which the league was formed. PCB officials are thought to be worried that any change in the model of the league might catch the attention of the state's financial oversight and regulatory authorities such as the National Accountability Bureau (NAB), the Public Account Committee (PAC) and the Auditor General of Pakistan.
Such agencies have, in the past, got involved in these matters. The former board chairman Najam Sethi, for example, was questioned by PAC for authorising payments of USD 400,000 (PKR 6.76 crore) to each franchise in 2016 - payments which were designed to offset losses made by franchises in the first season of the league. The Auditor General of Pakistan has also previously raised concerns about the low prices the franchises were initially sold at. As the board chairman remains a political appointment in Pakistan - appointed ultimately by the Prime Minister - the worry is that every change in government brings with it changes in personnel in key institutions (such as NAB), which are then deployed against prominent figures in the previous regime.
The other, more recent source of tension between the franchises and the board discussed at the meeting was the emergence of the Kashmir Premier League. Recently held, the private league drew upon a nearly full roster of players from Pakistan's domestic circuit. The franchises felt that with a National T20 Cup already in the calendar, the KPL was simply exploiting and cannibalising the commercial space in which the PSL - the board's showpiece event - was operating.
Ramiz is due to meet with franchises again on Monday.

Umar Farooq is ESPNcricinfo's Pakistan correspondent