Case is being heard in the Lahore High Court
A legal battle has emerged between the Pakistan Cricket Board (PCB) and the Pakistan Super League (PSL) over the financial model of the cash-rich 20-over tournament.
According to ESPNcricinfo, the teams, Islamabad United, Karachi Kings, Peshawar Zalmi, Multan Sultans, Quetta Gladiators, and Lahore Qalandars, filed a collective petition in the Lahore High Court (LHC) in which they seek changes in the tournament’s financial structure.
According to the franchise, the 20-over tournament is making the PCB richer whereas the six teams have been suffering losses every season.
They have pleaded with the court to direct the cricket board to address their grievances and revise the model according to the mandate and make it financially feasible.
The financial model of the PSL has come under question since the inaugural edition took place in 2016. So far, the sides are unable to break even whereas the inclusion of the sixth team i.e. Multan Sultans decreased everyone’s share from the revenue pool.
The PCB had earlier claimed that the participating teams would be able to break even when the tournament is fully staged in the country as it will be less expensive than organising it in the United Arab Emirates and it will also boost the economic activities in the country.
The 2020 edition was organised entirely in Pakistan for the first time in its history but it was halted halfway due to the coronavirus pandemic. The tournament will resume behind closed doors from November 14 and the sides have expressed that their share of profits will be affected even further.
“Given the uncertainty in the situation, it cannot be reasonably predicted if the matches will resume in-stadia and in the same manner as before which clearly means that the profitability of the franchisees will drop further since there may not be enough gate receipts,” the petition read.
“In addition to the same, it is an admitted fact by PCB that they have terminated their contract with the international broadcaster and have been involved in legal proceedings with their domestic and international broadcasters. This further affects the Central Pool Income and places the broadcasting rights and revenues from the same in jeopardy. This has created further uncertainty despite which PCB is insisting on the payment of security for the franchise fee in its entirety.”
It also mentioned: “PCB is not only an organiser of the tournament but is also the regulator who is bound to act in a fair, reasonable and equitable manner and insistence upon the payment of security before the situation has settled and uncertainty relating to COVID-19 has subsided, is unreasonable.
“It is also pertinent to note that while the uncertainty has affected the revenues of the Petitioners, PCB has continued to ensure that its own profits and revenues from the franchise fee are not affected which demonstrates the exclusive power that it exercises as the regulator,” it stated.
Justice Sajid Mahmood Sethi heard the case on Friday and issued a notice to the cricket board.
Alamgir Tareen, the lawyer representing the six teams, argued that his clients received a notice from the PCB asking them to pay a guarantee. He also said that the matches were affected by the coronavirus pandemic and the game tickets are the biggest source of revenue for them.
The lawyer representing the PCB, Taffazul Rizvi, in his arguments, claimed that that the cricket board had called a meeting with the petitioners to discuss the matter but they did not show up. In his reply, he claimed that the teams have been earning through broadcasting rights.
Tareen then went on to say that his party will not be earning that much when the competition resumes and the PCB, in its press release, had announced that had ended the broadcasting rights system.
The cricket board, in its press release, confirmed that they have received the notice.
“The Pakistan Cricket Board’s legal representatives were present before Mr. Justice Sajid Mahmood Sethi on Friday and received notices for hearing in respect of the Writ Petition filed by the six franchise owners, fixed today as an Urgent Petition,” the release read.
“The counsel for PCB, Taffazul Rizvi, raised a preliminary objection with regard to the maintainability of the writ petition and also apprised the Honourable Judge that the PCB had twice this week invited the franchise owners to meet and discuss the financial model for Pakistan Super League with a view towards redressing grievances in good faith.”
It further mentioned that the PCB lawyer also informed the court that as per the agreement, the proper way for any dispute resolution between the PCB and the franchise owners was through the initiation of arbitration and therefore, the franchises’ writ petition was misdirected and was liable to be dismissed.
“On the Honourable Court’s instructions, the PCB will be submitting its written comments by Wednesday, 30 September, which is the next date of hearing,” the PCB stated.