KARACHI: An audit report by the Pakistan Auditor General’s office has revealed that the PCB is losing millions of rupees in revenue from its Pakistan Super League due to financial sharing model with six franchises and other discrepancies.
Details of the audit report surfaced in the Pakistani media indicate that the PCB tried its best to give the impression that all is well with the PSL as a financial brand.
The AG’s report has expressed concern over the financial model and matters related to PSL and also recommended a thorough investigation into these matters.
The audit report states that contrary to popular belief, the board is incurring losses from the PSL after tampering with the financial model of the league.
This loss is due to the changed profit-sharing arrangement relating to the central pool of revenue generated by PSL.
The audit report said the PCB suffered a substantial loss of Rs 1,637,977 million due to the increase in the share of PSL franchises in the central pool.
Interestingly, under the 10-year agreement signed between the PCB and the franchises, any amendments could be made only after the completion of 10 years in 2025.
The AG report said the PCB suffered losses from the fifth edition of the league, where the franchise’s share in media rights increased to 80%, leaving only 20% for the board.
Similarly, sponsorship rights were divided with 40% given to the franchises and 60% to the board and even in ticket sales, 90% was given to the franchises and only 10% to the PCB.
The AG’s report states that this resulted in a potential revenue loss of Rs 810 million to the PCB.
This financial blow increased to Rs 827 million in the sixth edition of the PSL, and the audit report estimates a substantial potential loss of Rs 10,751 million for the board from the 7th to the 12th edition, if the profit-sharing formula tilts in its favour. Has happened. Franchise.
According to the report, the board also faced revenue losses in the sixth and seventh editions of the PSL held during the Covid pandemic period, with travel, accommodation, match fees, medical and other costs rising to Rs 178 million.
The PCB also had to pay additional production costs of $2.423 million (Rs 545.175 million at Rs 225 per dollar).
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The audit states that, according to the contract, this amount was to be paid by the franchisees, but the board covered the costs, necessitating further investigation.
The AG report also points out that the board has from time to time failed to obtain the required bank guarantees from the franchises and still does not allow them to participate in the league.
Reports reveal that in the 5th edition, the board did not secure the required bank guarantees, putting Rs 3,293 million of PSL earnings at risk.
The AG’s report also points to problems in the Board receiving franchise fees of Rs 2,170,476,000 and other expenses of Rs 1,122,764,806, resulting in a total of Rs 3,293,240,806, which was not protected with the acquisition of bank guarantees.
The AG report also points out that the PCB did not deduct income tax from the prize money given to match-winning players in the fifth and sixth editions, causing loss to the national exchequer.
