Why the cancellation of the India-Pakistan tour can seriously dent the PCB

Excitement outside the stadium on eve of the India-Pakistan clash in the 2015 World Cup

For an Indian cricket fan, there are very few things that generate more excitement than an India-Pakistan bilateral cricket series. However, a bilateral series between the two nations has become an increasingly rare occurrence, as a breakdown in cultural ties over various political issues as well as the concern over security issues has made the organisation of such a series progressively more difficult.

This has become increasingly evident by the fact that the last bilateral series between the two countries was played in 2012-13, with one having to go all the way back to 2007 to find the time before that. This is in sharp contrast to the period from 1995-2006, with a total of nine series happening in that time frame. The desire for fans from both countries to see these high-octane matches has been slightly alleviated by their meetings in various T20 and ODI World Cups, but these have been mostly one-off incidents over the last few years.

Hope for the resumption of cricket ties blossomed again in 2014, with the Pakistan Cricket Board (PCB) and the Board of Control for Cricket in India (BCCI) signing a Memorandum of Understanding in 2014 that committed to playing 5 bilateral series over the next 8 years. However, a subsequent deterioration in political relations between the countries led to calls to abandon the series proposed for December 2015.

As things stand the possibility of the series taking place does seem remote, but it has not been completely ruled out by either country’s board. However, on November 9th, the current BCCI chairman Shashank Manohar reminded attendees at the AGM about the MoU signed last year and said that steps were being taken to ensure that the series does happen, whether in India or in the UAE.

According to the latest developments, India are willing to play Pakistan, but only if the matches are held in their own country – contrary to the agreement as per the MoU, which had stated that Pakistan would host the series. Some within the PCB are unwilling for the series to be hosted in India. However, the financial impact and relevance that any series with India would have for the PCB might force them into making concessions in this regard.

The value of a series

With India being the dominant force in the financials of world cricket, as well as being home to the largest market of cricket consumers, it is no surprise that a series involving India is currently the prize catch for all the other cricketing nations. The involvement of the BCCI, combined with broadcasting rights that reach the Indian market generate significantly more revenue than a series involving any two other teams.

It is in light of this fact that the failure to be involved in a bilateral series against India will severely affect the financial state of the PCB. Many broadcasting deals that domestic boards enter into have stipulations that there would be at least one series against India over a particular time period, failing which the entire value of the contract would not be paid out.

This is exactly the situation that the Pakistan Cricket Board finds itself in. The PCB chairman has gone on record to say that the PCB would be forced to resort to downsizing if the series with India doesn’t happen as scheduled. The PCB currently has a 5-year broadcasting deal worth around $145 million, but this is based on the condition that there is at least one bilateral series with India within this time frame.

PCB officials suggest that the failure to hold a bilateral series with India could see the broadcasting revenues drop to anywhere from $80-90 million.

The woes for the PCB don’t just end there. The revenue from the India series is absolutely crucial to the functioning of the PCB. The PCB has many administrators and officials in well-paid positions across the country, including the National Academy of Cricket at Lahore. The PCB has already received recommendations from outsourced human resources firms that state the importance of downsizing so as to be more efficient.

The loss of the revenue from the potential series could extend far beyond the $60 million already mentioned. As per the terms of the 2014 MoU, a total of five series were slated to be played over an 8-year period. It was estimated that the PCB would earn almost $450 million from the tours, in addition to their existing broadcasting deal. Each tour is estimated to earn them around $60 million, in addition to $150 million that they would receive from the International Cricket Council (ICC) for participation in those events.

This is due to the increased funding in the game as well as the new revenue distribution model adopted by the ICC.

Impact of the Pakistan Super League

The Pakistan Cricket Board has, in an attempt to boost cricket following as well as their own revenues, launched the Pakistan Super League (PSL), of which the debut season takes place in 2016. The League has 5 teams (each with a cap of $1 million), a host of international players and a prize pool of $10 million. The league is modelled along the Indian Premier League (IPL), and Australia’s Big Bash League. The first edition is to be played in Qatar due to security concerns regarding the presence of foreign players in Pakistan, with future editions to be played in Pakistan if the situation allows it.

While this is no doubt a commendable move by the PCB to increase local talent, the lack of clarity regarding the bilateral series with India will surely be a cause for concern for PCB officials. The PSL has already had plenty of issues regarding funding and logistics, with the League first being announced in 2009. Various funding, security, and logistical concerns prevented the actual commencement of the League until the current scheduled date for 2016.

The PSL may prove to be beneficial for Pakistani cricket in the future, but its future itself may be dicey if the PCB does not have the revenues to ensure that it can be sustained over time. While it may be tempting to make comparisons with the IPL, the fact is that they are radically different events in terms of the audience and market, in addition to the funds available.

The PSL launches at a time where the IPL is an industry behemoth, and it also faces competition from Australia’s Big Bash League. The games are also being played in Qatar, which would surely detract from the overall atmosphere.

The PSL certainly has the potential to be a cash cow for the PCB, but as a fledgling product in an already competitive market, it will need nurturing. However, each season of the PCB is estimated to cost in the range of $15 million. The PCB has already had documented issues regarding payment of players and associated staff in the past. The costs of staging the PSL (which are higher than they would normally be due to the fact that it has to be hosted overseas) will certainly be an issue for an organisation that already has a history of non-payments..

It should also be stressed that with the World T20 scheduled next year, the Champions Trophy in 2017 and then another World T20 and the ODI World Cup in 2019, the solvency of the PCB is not an issue for the time being. However, PCB officials have admitted that they would be heavily dependent on ICC revenue distribution to meet their expenses if the series does not happen in December as originally scheduled.

Fans of both countries would no doubt be thrilled if the series was to happen, regardless of whether it is in Doha or in Delhi.