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PSL 2017 — Great for spectators and players but can everyone else play the long game?

The PSL 2017 comes at a great time for Pakistan. The economy continues to grow healthily and buoyed by the rising stocks and real estate markets, there is growing liquidity and an urge to find ways to invest it. With limited global investment opportunities and the modern day realities of stricter global tax regimes, Pakistan remains the best option for Pakistani investors.

The PSL follows on the heels of other T20 competitions that had modeled themselves on the Indian Premier League (which itself was based on the phenomenal success of the English Premier League in football). In 2008, the ingredients were perfect to launch the IPL – a highly energized and ambitious promoter in Lalit Modi, a huge cricket obsessed local population, Bollywood stars and business magnates as owners, dancing girls, iconic cricketers and willing deep pocketed sponsors and investors. It was an instant hit.

There have been three main sources of funds for the IPL– broadcasting rights, sales of franchises and sponsorship. Just the broadcast rights and franchise sales have raised over $ 1.7 billion over a 10-year period. Television revenue and sponsorship income are paid into a central revenue pool with floating revenue sharing agreements attached between the IPL and the franchise owners. Franchises also have the added benefit of arranging their own sponsors as well as gate receipts and match day sales. While only a limited number of franchises have made a profit, this 10-year period has seen the values of each franchise rise by multiples.

The depth of the domestic and international viewing public of the IPL leaves its marketability unparalleled. By way of comparison, the IPL sold its 11 franchises in 2008 for approximately $730 million compared to $93 million committed by the 5 franchise owners in the PSL. The Indian Premier League negotiated a TV rights deal with Sony for $1 billion in 2008 for a 10-year period compared to $20 million over 3 years for television rights and title sponsorship.

The total prize money of the PSL is $1 million compared to $5.9 million just for the winners of the IPL.

The good news for the PSL is that it has started despite being the last to the table. Due to the public popularity of these competitions, the Pakistan Cricket Board (PCB) was able to achieve a premium value for the teams resulting from the goodwill achieved to date from the IPL and others. PSL 2016 was a success in terms of record television viewing and advertisers will be happy to date – but they won’t really be jumping in with long term lucrative contracts for a while.

While the UAE has been an accommodating and useful host for the PCB, the real added value comes from hosting the competition at home. Filled stadiums, the excitement of watching international stars play alongside one’s own and witnessing new and previously unheard of talent create the right ambience that advertisers love in order to yield the maximum mileage for their advertising Rupee.

Hosting the 2017 final in Lahore is a great step in the right direction and even though there are a number of international players already backing out, a successful and safe final will be the best PR tool for the PSL when next year’s plans are launched. Let’s hope that the investors and advertisers have the grit, patience and holding power to stay in the game.

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