Auction of two new PSL franchises: Who is participating in the bidding and what is different this time?

 Auction of two new PSL franchises: Who is participating in the bidding and what is different this time?

 

A total of 10 interested parties, including local and foreign companies, will compete in the auction for two new franchises of the Pakistan Super League (PSL) on January 8 in Islamabad. But this time the process of selling the franchise will be different from the past.

Instead of the previously used sealed bid method, the PCB has decided to open auction, which is likely to increase the bid price.

According to the documents, the auction process will begin with the announcement of a reserve price, while bids will be placed by the parties in real time.

The winning party will get the new franchise and will be able to choose any of the six cities for the team - Faisalabad, Rawalpindi, Hyderabad, Sialkot, Muzaffarabad and Gilgit. There is also a procedure for if a successful bidder suggests the name of a city outside the list.

The PCB will charge a one-time fee of US $ 1 million, after which it can consider it. However, the final decision will be up to the board.

This opportunity to acquire a PSL franchise comes after a gap of eight years, while the league has now completed a decade since its first season in 2016.

The PCB, which is the sole regulatory body of the PSL under the current agreements, had already planned to add two new teams to the league from 2026, which would increase the number of teams from six to eight.

The last franchise was sold in 2018, when Multan Sultans was auctioned. The PSL initially started with five teams, and at that time matches were played in the United Arab Emirates.

Who are the 10 bidders who want to own the new PSL team?

The parties involved in the auction belong to various business sectors including telecom, energy, fintech, real estate and technology.

Jazz

Pakistan’s largest digital telecom company Jazz is a prominent name in this auction. This is Jazz’s second attempt to acquire a PSL franchise.

Earlier, when the PSL was launched in 2015, the company, then known as Mobilink, participated in the bidding but failed.

Later, Jazz signed a three-year title sponsorship deal with Lahore Qalandars and has been marketing its brand through cricket ever since.

Ali Tareen

After parting ways with Multan Sultans, Ali Tareen is once again interested in the PSL. He is bidding for the new franchise through his company Daharki Sugar Mills, which is located in Ghotki district of Sindh. Ali Tareen belongs to a large industrial group while his father Jahangir Tareen is one of the country’s political and business figures.

Notably, Ali Tareen had refused to retain his previous franchise Multan Sultans, which had an annual value of Rs 1.375 billion.

Inverex

Inverex, an energy company, has been associated with Pakistan Cricket and PSL before. The company has played a prominent role in promoting solar energy and clean mobility. Highlighting those who have rendered outstanding services in sports and other fields through the 'Our Heroes' segment during the PSL has become their hallmark.

VigoTel

Local mobile technology brand VigoTel is also among the companies investing directly through sponsorship of PSL and Pakistan Cricket.

WalliTech

Marketing technology and fintech firm WalliTech has been interested in digital rights to cricket. The company acquired the digital live streaming rights of PSL for Rs 1.875 billion for two years in 2014.

Prism Estates and Builders

The real estate developer is participating in the auction as part of a consortium that also includes cryptocurrency exchange company XchangeOn, which sponsored the PSL last season.

OZI Group

Australia-based OZI Group is foraying into the cricketing arena for the first time. According to the group’s chairman, he moved to Pakistan with his business and family two years ago. The name ‘OZ’ is derived from an Australian social term.

i2c

i2c, a global fintech company working in digital banking, payments and card solutions, is also one of the prominent foreign entities involved in the auction.

Kingsman Group

This is a diversified investment group that owns various cricket properties in North America. The group includes teams like DFW Kingsman and Kingsman X. According to sources, if this group is successful, it is interested in taking a team named Hyderabad.

MNext Inc.

This technology and innovation company from North America is also in the race for a PSL franchise.

How will the PSL franchise auction be held and what will the bidder have to do?

The auction for the new Pakistan Super League franchises will start with a reserve price, which will be announced before the auction. The auction will consist of two stages and the bidding will be conducted in real time.

The highest bidder will not only get the franchise but will also get the first choice of the available cities. The winning franchise will be given the rights for 10 years, which will continue until 2035, while later it will also get the first right of refusal (i.e. the right of preferential renewal).

During the initial three years, the franchise owners will not be able to sell, transfer or assign any rights related to the team to anyone. According to the bidding document, the PCB has guaranteed each new franchise a minimum revenue of Rs 850 million per season for the next five seasons.

This time the franchise sale process will be different from the past. Instead of the previously used sealed bid method, the PCB has decided to go for an open auction, which is likely to increase the bid price.

In the sealed bid method, each party submits its bid in secret and no one knows the amount offered by the other. Bids are opened at a fixed time and the franchise is awarded to the highest bidder.

Companies and individuals interested in participating in the auction had to go through a rigorous vetting process, which assessed their financial standing, reputation, business transparency, management capacity and long-term stability.

To participate in the bid, interested parties had to deposit a non-refundable bid fee of US$20,000 (approximately Rs. 56.4 million).

In addition, each bidder was required to deposit a security deposit of US$200,000 (approximately Rs. 56.4 million).

This security deposit will be returned to unsuccessful bidders without interest, while in the event of a successful bid, this amount will be adjusted towards the initial franchise payment.

However, if a successful bidder does not sign the franchise agreement within three days and fails to make the stipulated payments or provide the guarantees sought by the PCB, its security deposit will be forfeited.

How do PSL franchises make money?

The majority of the revenue of the Pakistan Super League franchises comes from the PCB’s Central Revenue Pool. This includes media rights, where 95% of TV and digital revenue is shared equally among all teams. Similarly, the franchises also receive 95% of the PCB’s revenue from title sponsorship and ground sponsorship.

Ticket sales, which include corporate boxes, hospitality and general tickets, are another source of revenue, although this is affected by the free tickets. Ticket revenue is also divided equally among all teams, regardless of the number of fans in a team's match. In addition, franchises also earn money through their own commercial deals, such as sponsorship logos on team jerseys, helmets and trousers and digital advertisements, which are separate revenues for each team.

, Image caption Quetta Gladiators is the lowest-valued PSL franchise with Rs 359.5 million

What is the current status of the six current PSL teams?

All the remaining PSL franchises have extended their contracts. However, Multan Sultans was the only franchise whose owner Ali Tareen did not extend, after which the PCB took over the ownership of the team. The PCB will run Multan Sultans itself in the upcoming season and then the franchise will be sold to a new buyer.

The Tareen family paid Rs 7.7 billion to the PCB in the last seven years as Multan Sultans’ franchise fee. After the new valuation, the annual franchise fee of Multan Sultans was fixed at Rs 1.37 billion. According to the agreement, after the completion of ten years of PSL, the annual fee of all the current franchises is required to be increased, which will be either 25 percent of the current fee or 25 percent of the new market value, whichever is higher.

Let’s take a look at the new valuation of other franchises.

According to the new valuation:

Lahore Qalandars has become the most valuable franchise of PSL with Rs 670 million.

Karachi Kings has become the second most valuable franchise of PSL with Rs 630 million.

Peshawar Zalmi has been declared the third most valuable franchise with Rs 480 million.

Islamabad United's franchise has been valued at Rs 470 million.

Quetta Gladiators is the least valuable franchise of PSL with Rs 350 million.