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Economics of Pakistan Super League

In the current world of globalization markets and their economies leading from the front and every activity of residents of any nation are measured economically. In past most of the people used to utilize their leisure hours (entertainment) in watching sports which was quite casual and relaxed but today’s sport is often organized, mechanized, marketed, and administered as a business. Commercial interests influence virtually every decision in sports. Events are rated by television audience share, tickets sales, web site hits, concession sales, and sponsor revenue and media coverage. Wins and losses are also important because they influence all of these standards of measurement. As sport is growing more into a business, the corporate model is entering into the organization of every sport entity and governing bodies. As the sports industry is emerging as an economic power, it catches the commercial interests which not only benefit the organization in terms of revenue and sales but also support to build the branding image. With the development of industry, players grasp the core importance as the fan following of the player will decides the firm’s revenue and serve the organization against high monetary rewards. However, there are some factors that still affect the drumfire of commercial sports are:

  • Player’s time to practice sport as they are becoming part of a bigger organization instead of self-employed, they can spend more time away from work, thus, practice sport.
  • People need money to spend on sports and being the developing nation very few people especially in urban areas have the strength to afford to be the part of it.
  • Media such as newspapers, television, the internet and radio, are all providing access to sports that sometimes discourage watching it live in stadiums.
  • Sports facilities and venues are located in highly populated areas and security measures mostly create big problems for the citizens lived nearby due to diversions creating negative externality for those citizens which eventually affect the popularity of game directly and sports revenue stream indirectly.

The momentum that the sport movement gives to the country, the involvement that it requires, the partnerships that it demands, all contribute to a certain socioeconomic reverberation keeping in mind that the organizer of any sports event directly or indirectly involves the use of partners in the society thus, helping the economic wheel to move forward. The events will also accelerate the pace of revenue generation due to expenses consume for hospitality, transportation, food supplies, aviation, sports kits and goods, tourism along with the advertising and printing industries. It also enhances the promotion of culture, customs and national image of the country. Pakistan being the sports loving nation recognized for its Cricket, Hockey and Squash but during the war against terrorism, Pakistan badly lost its reputation internationally. Therefore, many of the countries refused to visit Pakistan for the tours. Amid of this crucial time, establishment of Pakistan Super League initiated the self-sustained domestic league as an initial attempt to restore the country’s image along with the aim to bring back International Cricket in Pakistan. With the population of more than 190 million, Pakistan Super League (PSL) first edition was golden opportunity for foreign cricketers to win loyalty in a country that is usually known for supporting only their own race members. With the passage of time, it gains popularity and reputation with the first PSL tournament in Dubai, then mutual tournament in Dubai and Pakistan and now the whole tournament is hosted by Pakistan with the return of International Cricket back in Pakistan by developing the nation branding.

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If we look at the statistics, the Pakistan Super League has become a major source of income for Pakistan Cricket Board (PCB), which will earn more than Rs. 3.69 billion from the fifth edition of the T20 league in 2020 which is more than 40% of total income of the PCB, which has allocated a budget of more than Rs. 1.84 billion for PSL in new financial year. Last year, the Board earned Rs.3.17 billion against expenditure of Rs 1.91 billion from PSL. In 2018-19, the PCB allocated the budget of Rs 2.37 billion, which generated the income of Rs 2.87 billion approximately. According to the sources, the PCB allocated the budget of Rs 190.8 million for executive secretariat. Last year, more than Rs 150 million was spent on the same department. The budget of Rs 620.25 million has been allocated for human resource and administration while last year, the board spent more than Rs 360.34 million on the same department. For international cricket operations, more than Rs.1.90 billion has been allocated in new financial year 2021, which is 24% of total budget. The Board is expecting income of Rs 3.75 billion from International Cricket Operations, which was Rs. 6.25 billion last year while total expenditures were Rs 1.74 billion. Therefore, there is no doubt that collectively PSL will be the outcome for the efforts of PCB, which will benefit Pakistan cricket not only in short run but also in long run in terms of economic gains. In the National T20 tournament, which took place in August 2016, the cricketers were paid £100 per game, which is quite cost effective for team owners. The monetary benefits due to PSL contract, motivates the youngsters toiling away in the Pakistan domestic scene and also pushes them to work harder in hopes of obtaining a contract unlike past in which only placement in national team ensures financial security. Now players meet their financial needs through PSL as many domestic cricketers are from underprivileged backgrounds. In addition to that the additional money gained by the cricketers due to the league can be used on purchasing enhanced cricket-equipment, and expanses for dieticians and nutritionists. These are luxuries the cricketers could never afford earlier. The biggest benefit of PSL is that upcoming Pakistani cricketers have the experience of playing with cricket legends that leads to professionalism by learning pre-game preparations and games under pressure which is previously a paid activity by PCB. Therefore, PCB gains financial benefits out of it and in spite of the fact that PSL struggles stand in contrast to a blooming world’s sports industry as sports tourism and entertainment according to international experts are almost $4.1 trillion and projected to be $5.72 trillion till 2021 with the compound annual growth rate of 41% (CAGR). Therefore, Pakistan and PCB are striving hard to be the part of this global sport by expanding on the Pakistan Super League.

The contributor is in Faculty Dept of Management Studies, Bahria Business School-Karachi

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