Karachi, Dec 24 (PTI) An audit report by the Pakistan Auditor General’s office has shown the PCB has been suffering revenue losses in millions of rupees from its Pakistan Super League due to the financial sharing model with the six franchises and other anomalies.
The audit report details which have surfaced in the Pakistani media indicate that the PCB went out of its way to give the impression that all was well with the PSL as a financial brand.
The AG’s report has expressed its concerns over the financial model and matters off the PSL and also recommended a thorough investigation into these matters.
The Audit Report states that contrary to the general impression the board has been taking losses from the PSL after it tinkered with the financial model of the league.
The losses have come about because of the changed profit-sharing arrangement related to the central pool of revenue generated by the PSL.
The audit report notes that the PCB incurred a substantial loss of 1,637,977 million rupees due to an increase in the share of PSL franchises in the central pool.
The interesting part is that under a 10-year agreement signed between the PCB and the franchises any amendments could only have been made after completion of 10-years in 2025.
The AG’s report notes that the PCB suffered losses starting from the fifth edition of the league where franchises share in media rights were increased to 80%, leaving just 20% for the board.
Similarly, sponsorship rights were divided with 40% going to franchises and 60% to the board and even in the sale of ticket sales 90% went to franchises, and only 10% went to the PCB.
The AG’s report points out this resulted in the PCB missing out on potential revenue of 810 million rupees.
This financial setback increased to 827 million rupees in the sixth edition of the PSL, and the audit report forecasts a substantial potential loss of 10,751 million rupees for the board from the 7th to the 12th edition if the profit-sharing formula is tilted in favour of the franchises.
The board, according to the report, also faced revenue losses in the sixth and seventh editions of the PSL held during the Covid pandemic period in which travelling, accommodation, match fees, medical and other costs increased to 178 million rupees.
The PCB also had to dish out extra production expenses amounting to 2.423 million dollars (545.175 million rupees at the rate of 225 rupees per dollar).
The audit points out that, according to the contract, this amount was supposed to be paid by the franchises, but the board ended up covering the costs, prompting the need for further investigation.
The AG report also points out that the board has from time to time failed to secure the required bank guarantees from the franchises and yet allowing them to participate in the league.
The reports discloses that in the 5th edition, the board didn’t secure the required bank guarantees, putting 3,293 million rupees of PSL income at risk.
The AG’s report also points problems in the board receiving franchises fees amounting to 2,170,476,000 rupees and other expenses of 1,122,764,806 rupees leading to a total sum of up to 3,293,240,806 rupees, which was not protected with the acquisition of bank guarantees.
The AG report also points out that the PCB didn’t deduct income tax from the prize money awarded to match-winner players in the fifth and sixth editions which led to losses to the national treasury.