Sri Lanka Cricket has cancelled the Sri Lanka Premier League for 2013, after all eight franchises failed to pay the tournament fee and the bank guarantees for player payments, an official release confirmed. The franchises had breached two payment deadlines and forced the postponement of the player draft, and will now have their contracts terminated by SLC. The tournament was due to take place between August 10 and September 7.

"We want to maintain the integrity of the board and the integrity of the tournament, so we had to take a stand," SLPL director Ajit Jayasekara said. "We can't have a situation where the franchises say, 'We will pay if the other franchises pay'.

"Player payments are a major factor in this. We are the only league in the world not to have defaulted on our player payments, and the franchises failed to provide those bank guarantees. We have given them enough chances and we can't stand this nonsense."

Jayasekara said the franchises had not made it clear to SLC that they did not wish to be a part of the tournament, and instead continued to promise to make the payments, before ultimately failing to deliver. In March, the franchises had successfully sought to increase the lease period for the teams from seven years to 15, amid fears seven years would not be sufficient to recoup their costs, but they have now seemingly opted to cut their losses after one season.

All eight franchises and SLC's marketing partner Somerset Entertainment Ventures are understood to have made a loss from the inaugural tournament, but SLC had a profit of 289 million rupees (approx. USD $2.3 million). The franchises were due to pay USD $4.3 million a year on average, in order to participate in the tournament, but would have had to sustain operational costs in addition to that.

Jayasekara said SLC "haven't invested a cent" in this year's tournament as they were simply making preparations, and had relatively little to lose from cancelling the tournament. The board will, however, consider playing the tournament in 2014, but not before arriving at a new business approach.

"SLPL is suspended for this year, so now we have to sit with our partners, Somerset, and decide on a new model," Jayasekara said. "We have to decide on how and if and when we are going to call for bids for the franchises and get committed organisations."

The tournament had been scheduled to begin in 2011, but was cancelled that year, after the BCCI refused to allow its players to participate in the tournament. The inaugural season, the following year, was then largely plagued by poor crowds and a lack of interest at home. There were also allegations of spot-fixing in the tournament, though the tape which was provided as evidence was later found to be a fraud, according to Jayasekara. In addition, the Uva Next franchise that won the tournament, left several operational expenses unpaid, including refusing to foot costs to send the team to the Champions League.

The three Tests, from South Africa's ongoing tour of Sri Lanka were also postponed, partly in order to allow the SLPL to be played. The Future Tours Programme had set aside most parts of the months of July and August for the tour, and despite SLC's official reason that it was the recently completed tri-series in West Indies that made the Tests against South Africa impossible, the dates originally allocated for the tour almost certainly clash with the SLPL schedule.

SLC has not yet sought a reinstatement of those Tests, in light of Sri Lanka's now clear schedule, but it is unlikely that if such a request is made, that CSA will agree to a Test series at such short notice.

The board has also announced an inter-provincial Twenty20 tournament will be played in place of the SLPL in August, the winner of which will represent Sri Lanka at the Champions League in India the following month.

Andrew Fidel Fernando is ESPNcricinfo's Sri Lanka correspondent. He tweets here