ALARMING: PSL is set to sink if its current business model is not changed

0
552

The Pakistan Cricket Board (PCB) is said to be raking in somewhere around Rs1.7 billion annually in revenue through its flagship event, the Pakistan Super League. But according to some sources, the league is set to sink if its current business model is not changed.

“Franchises are incurring losses and they can’t keep that up for long. They will shut shop [if things didn’t change for the better],” an inside source confided to Profit. “The franchise owners initially enjoyed the status and attention they received, but now they’re starting to feel the heat from all the money they’ve been burning.”

According to another source, the cheapest of the first five franchise, Quetta Gladiators, has already incurred losses to the tune of Rs320 million even as the league moves through its third season. Not surprisingly, the Gladiators have not been forthcoming with the details and did not respond to any of the questions posed to them. Naturally, the losses incurred by other franchises must be even higher, given the more substantial annual fees they have had to pay out.

According to well-placed sources, the Karachi Kings, the most expensive team in PSL at $2.6 million annually, was looking to haul in sponsorship worth Rs900 million before the season 3 kicked off. Meanwhile, the Quetta Gladiators was looking to touch somewhere around the Rs400 million mark.

However, a source said that the hopes of receiving such big sponsorships won’t be happening any time soon.      

Of the branding done on venue in a PSL match, 70% is reserved for the PCB, explains our source. The two franchises’ playing on the day apparently have to split the remaining 30% of branding space.

“From a marketing perspective, what the IPL has been doing is quite understandable since mostly the fans of the two franchises are interested in the match. So, the brand association of the two franchises with their fans cannot truly be capitalized in the PSL’s case,” the source added.   

Majority of franchises in default:

There have also been reports, carried by daily Dawn, that a majority of the franchises were in default with the PCB, which may take over defaulting franchises and auction them all over again.

However, the Peshawar Zalmi, the Quetta Gladiators and the Islamabad United – the three most successful franchises in PSL – so far have all come on record to announce that their accounts with the board were in the clear. The PCB has kept mum on the issue.

“It really cheesed off sponsors. Who would sponsor a team that has been defaulting and might lose their rights on the franchise?” the source said.

One marketing head, who has information about the ongoing sponsorship deals of some of the franchises, said that prospective and current sponsors do not seem as keen to jump the gun this time around.

“Why would sponsors be interested when you haven’t prepared a good package for them? There is little understanding about the things sponsors want. According to my assessment, only the Karachi Kings has tried to attract sponsors. It has flexed its media muscle to impress sponsors, but I think even they are trying to sell their sponsorship rights expensively,” he said.     

The Karachi Kings owner Salman Iqbal has also confessed that there are fewer sponsors this time around.

“There are two sponsors this time while there were around nine last time. But these two sponsors outweighs that nine,” Iqbal said during a Karachi Kings’ partnership with yayvo.com by TCS.

Bahria Town is the main Titanium sponsor of Karachi Kings while Arkadians and Nurpur are their platinum sponsors. Nurpur of Fauji Foods joined just as the tournament was around the corner. Imtiaz Super Market is also said to be sponsoring Karachi Kings and are their super market partner.   

However, an official of the PCB seemed skeptical of Salman Iqbal’s explanation, and said it was difficult to comprehend how two sponsors can outweigh nine.

Bizarre explanation:

The skepticism is understandable, but from the point of view of someone like Salman Iqbal, if his franchise is to keep its brand value intact, it needs to demonstrate that it is getting enough sponsorship. However, given the visibility, since they cannot lie about the number of sponsors, the team owners thus had to come up with such bizarre explanations.

According to a Karachi Kings document, it has put Titanium sponsorship up for sale for Rs200 million, while its Platinum sponsorship is said to be selling for Rs150 million.

However, a source close to the development said that the Bahria Town became Titanium sponsors for Rs40 million – five times less than what the Karachi Kings quoted in its document for potential sponsors, while Arkadians and Nurpur too have paid up only Rs20 million apiece against the demand of Rs150 million each for platinum sponsorships.

“The Karachi Kings have received sponsorship of around Rs80 million. However, they will not be incurring losses this time since they would also be receiving from central pool of ticket sales and broadcasting fee,” the source said. 

 

[divide icon=”square”]

Mediabites Editorial – Courtesy: The Profit (Pakistan Today)

 

LEAVE A REPLY

Please enter your comment!
Please enter your name here