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  1. #1
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    Does the Pakistan Super League possess a sustainable financial model?

    (I am not Financial expert, just posting as layman)

    Was BPL or SLPL a success ?

    No! Why not? They have all ingredients like foreign players, home grounds, crowd, big sponsors but they couldn't sustain. The issues of salary, many players remain unpaid.

    Many of us as cricket fan are unaware of success criteria of sports league.

    Inclusion of foreign players is only one step toward success but it itself is not success of PSL.

    From BPL or SLPL, it must be understood that if you have money, which PCB has thanks to ICC tournaments and TV rights, gathering foreign players, have sponsors on board and arrange a tournament is not very difficult task. But the real task is its sustainability and progress to heights.

    My question is

    1)What are the details of PSL financial model?
    2) Does PSL possess sustainable financial model?
    3) Will first edition will reach break-even or loss or how many years it will take PCB to go into profit?

    If anybody has detailed study, please let us know.

  2. #2
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    Yup, kinda like India itself trying its hand at creating football and hockey leagues. None of them really worked and i am haring the i-League footballers are struggling now as no club wants to buy them. Sustainability is the more important thing. Just for the sake of it, you might even host a formula one race, again India did it couple of times, wasn't too rewarding and never happened again.

  3. #3
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    If it can return to Pakistan in 2 or 3 seasons, it will become a huge success

  4. #4
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    It's difficult to comment on it with limited information thus far.

  5. #5
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    I think its 'blind spot' so very few can comment.

    But should we ask PCB to tell us about it?

  6. #6
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    Good question coming from an intelligent brain, I must admit. Sustainable financial model. I'm also not a finance expert too.

    Regarding BPL, I think all the franchises weren't able to pay the players and that's why it stopped. The board has to take the blame here. Because before giving franchising rights to the franchisee, the board should have checked properly whether they will be able to pay the players, pay other expenses & properly run the team without landing in debt or deficit (expenses exceeds income). The income statement, balance sheet, trading license, credit rating and other financial documents are required to decide that. The board checked them & may be felt that they would be able to pay but it turned out that the franchises couldn't. Often a bank guarantee is also taken from the franchises in case the franchise become unable to pay. BPL also faced corruption charges. Board even wasn't able to contact the franchise regarding the payment issue. So, that proves there was lack of legal obligation too in order to bind the franchises in a contract or agreement. The board was left with no choice to terminate all the franchises.

    I believe similar thing happened with SLPL too. All the franchises couldn't pay the players.

    So, to make PSL sustainable PCB should have checked if the franchises are able to pay the players and operate the team, collect a bank guarantee and enforce legal bindings.

    At the time of making a business plan, a break even point (where income equals expense) is also estimated with assumed realistic data. Just a throw in the dark, the first year should break even let alone garner profit.

    I've these little ideas as I'm a BBA student.

  7. #7
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    Quote Originally Posted by Adnan Siddiqui View Post
    (I am not Financial expert, just posting as layman)

    Was BPL or SLPL a success ?

    No! Why not? They have all ingredients like foreign players, home grounds, crowd, big sponsors but they couldn't sustain. The issues of salary, many players remain unpaid.

    Many of us as cricket fan are unaware of success criteria of sports league.

    Inclusion of foreign players is only one step toward success but it itself is not success of PSL.

    From BPL or SLPL, it must be understood that if you have money, which PCB has thanks to ICC tournaments and TV rights, gathering foreign players, have sponsors on board and arrange a tournament is not very difficult task. But the real task is its sustainability and progress to heights.

    My question is

    1)What are the details of PSL financial model?
    2) Does PSL possess sustainable financial model?
    3) Will first edition will reach break-even or loss or how many years it will take PCB to go into profit?

    If anybody has detailed study, please let us know.


    You, my friend have asked a very complex and technical question that cannot be answered without complete information.

    However, I will give it a shot and try to keep it as simple as possible.


    First concept: This is an investment that should have a "Return of Investment" and a "Break Even Point"

    Initially, when you make an investment, you need finances for that investment to go through. Most of the times such initial capital comes from Financial Institutions in the form of up front loans.

    Based on the equity model we can say that there are certain liabilities that exist.


    For such a mega event, the return of and on investment period is longer than a few years. It may be 5 years but such financial models are all prepared beforehand and presented to investors.

    They are calibrated yearly and adjustments are made accordingly.


    Since it is a Franchise based model, PCB wants to create stake holders that also partake in the liability holdings. If they have a well devised strategy, they will be able to create liability partners above and over the budgeted estimates. That will mean that the PSL model will have immediate success as liability distribution will ensure that cash is available at hand to keep investors and lenders happy.

    Hence the first target or marker for PSL's profitability is the value at which franchises are sold.

    The second major investment is going to come from media partners. That again is going to determine whether it will be a long term project or not. A deal of 5 years will be a break through deal and can help the PSL to sustain.

    The logistics, marketing expenses come at the end. Since this even carries an excessive cost of holding PSL in a foreign country, the logistic expenses will be extremely high. The worst part is that it is being held in a country of higher per capita income resulting in negative forex benefit for PSL. However, as a standard US$ levels the field to a certain extent.

    (If it was held in a country which had a weaker currency than Pakistan, the cost benefit would have been massive)

    So far on the marketing front, PSL has achieved remarkably little or nothing. They really have to increase their marketing budget and ensure that they are targeting the right audience. It is also viable to know about their media partners and media strategy outside the physical limits of Pakistan. Targeting the English community say for example can be beneficial however such calculations are extremely internal and cannot be guessed by me.

    All in all, the model's success is not dependent on costs, the success is dependent on the investors and the initial plan to reach break even.

    Sports franchises are often considered as difficult to run operations and many franchises are investor groups - take EPL example and other sports as well where franchise owners are billionaires and have interest in the sport rather than a money minting operation. If we manage to get one or two such owners, the brand gets developed and the initial model is strong, there is no doubt in my head that PSL can be successful over a long period of time.

    However, if it is all paper work based on shoddy budget estimations, it will be another one of those failures that we continue to see everywhere in Pakistan.

    I hope that answers your question to some extent

  8. #8
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    It can only be sustainable if spectator culture is built in Pakistan.

    I have no idea what these middle class in Pakistan spend their money on but they definitely do not attend domestic cricket games.

    We need to build a culture which appreciates sport and spectating it. There even hardly a celebrity culture in the country.

    Right now the most popular celebrity like figures are politicians. This is how backwards the country is. Its living in the 40s.

    Stupid mindset needs changing to see the bigger picture. There is plenty of residual income within middle class masses to spend on cricket spectating but they don't want to commit or get into it.

    Its not like other sports are more popular like in other countries where football stadiums are packed and cricket stadiums are empty. Its the national sport for the love of God but all most people do is sit at home to watch the international games and then throw hissy fits in TV interviews after they lose and ignore the domestic scene.

    Pathetic loser mindset. Where is consumerism apart from eating in dodgy restaurants and shopping for counterfeit designer clothes in shopping malls?

  9. #9
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    Evidently tv rights are worth more than attendance which is why the PCB wants to play it in Qatar and have Gayle and Sangakkara instead of playing it in Pakistan with matches in all cities.

    It starts right after the BBL but before the IPL so there is no clash in that front.


    Quote Originally Posted by Saqs on Steve Smith
    And who taught him to bat? Chris Martin? Is he the Australian equivalent of ....wait, I'm struggling to think of another useless player of his calibre.

  10. #10
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    Well i am sure PSL will be a success and like Convict mentioned before that TV rights provides the greatest amount of money.

    I personally believe that the reason for the success of leagues like BBL, CPL(first 2 seasons) and IPL is mainly due to crowd attendance. A t20 match without the buzzing of the crowd makes for a dull experience. This disinterests TV viewers. Empty stands don't help really.

    So while its true that stadiums will not be jam packed by any means necessary but i am quite sure that the lack of an exciting environment won't particularly help anyone. Also, hosting a tournament overseas is not particularly profitable for the sponsors. Now, its going to be Pakistani companies who will be mostly interested in advertising their products, whilst this does help considering that the matches will be televised, the sponsors won't be too keen given that the entire stadium will not be used completely for advertisement because only the audience from the stadiums will be able to view them properly and ofcourse, it doesn't matter considering the fact that the products are not available in Qatar.

    BPL failed because of lack of proper paperworks that makes is mandatory for the teams to pay the required money or they will have to face legal action. This time around, BCB has taken all this into account, and will be directly paying the players themselves. However, there will be a certain lack of interest

  11. #11
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    Quote Originally Posted by Executioner View Post

    BPL failed because of lack of proper paperworks that makes is mandatory for the teams to pay the required money or they will have to face legal action. This time around, BCB has taken all this into account, and will be directly paying the players themselves. However, there will be a certain lack of interest
    As far as I know, Ban people are cricket crazies. If BPL can attract some big names & play their own players then I don't feel there will be lack of interest. This is also applied for Asian cricket contingent i.e. Ind, SL, Pak etc.

  12. #12
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    Quote Originally Posted by Sami92 View Post
    As far as I know, Ban people are cricket crazies. If BPL can attract some big names & play their own players then I don't feel there will be lack of interest. This is also applied for Asian cricket contingent i.e. Ind, SL, Pak etc.
    tbh no one really bothers that much now. There is no real buzz, and a cloud of uncertainty over which players will be participating and it is supposed to take place in 2 months. Furthermore, will be held in only 3 stadiums which doesn't help

  13. #13
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    @Adnan Siddiqui If you really want to know if it is. Please provide me with the initial investment, cash inflow expected from television deal, sponsorship and possible stadium audience. It would be a matter of just 4 steps to get an idea if its sustainable or not.

  14. #14
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    Imo. Breakeven in season 1 would be great. However, i expect it to be better than break even.

  15. #15
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    What pakistan needs is a shrewd businessman and well connected man like Lalit Modi.
    It also needs heavy PCB funding and Govt support.

    Of course PSL's objective is to promote cricket in pakistan but it cannot happen if it doesnt make money. It has to make money for PCB and for the franchise owners otherwise it will have the same fate as SLPL.

    As big as IPL is, i have heard that teams are still in loss. Its also a fact that many franchises have burnt their hands like Sahara, Deccan Chargers, Kochi tuskers etc. But then again, none of the franchise owners in IPL is looking for making money (may be RR, Kings XI, and KKR are exceptions), most of the owners are filthy rich and to be in limelight is the reason they bought teams.
    Last edited by Lords; 17th September 2015 at 10:17.

  16. #16
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    Nice answers by all. Keep contributing in this thread so we have some awareness.

    In near future expecting media reports on it but BEWARE in Pakistani media lot manipulation.

    Pak media is so weak in financial analysis matters that they will only rely on PCB press releases.

  17. #17
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    Quote Originally Posted by freelance_cricketer View Post
    Yup, kinda like India itself trying its hand at creating football and hockey leagues. None of them really worked and i am haring the i-League footballers are struggling now as no club wants to buy them. Sustainability is the more important thing. Just for the sake of it, you might even host a formula one race, again India did it couple of times, wasn't too rewarding and never happened again.
    F1 was cancelled because govt. changed in UP, tax benefits were withdrawn... rest all points true!!!

  18. #18
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    Unless you have home/away concept... You can name the team Mars and Jupiter.. it wont matter to the public.
    You wont have fans for the teams without home ground matches!!

    All matches in one place will kill it!!

  19. #19
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    PSL will be a success because the marketing team behind it is unbelievably good.

  20. #20
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    Didn't IPL make operating losses for its first few seasons too. I am sure it made so in the 2nd season after the shift to South Africa. So in a financial sense, not making a profit in Season 1 will not be end of the world.

    The problem I see is the lack of context. Will these new teams be in for the long haul to the point where fans may start identifying with them or are they just going to disappear in a few seasons. In that respect the current teams like Peshawar, Karachi Dolphins, Lahore Lions and ofcourse Sialkot Stallions do have some fan support and people might turn on the TV to just watch them. But with these new teams will people even identify with them? Considering that there are 5 teams and that the PCB has given regional associations no say in these teams why not just have the teams named after the 4 provinces and a Federal Areas Team? Or better yet get rid of Quetta and add Sialkot or just add Sialkot and make it 6 teams. PCB needs to seriously ask itself that why is it holding this tournament and does it envisage it something for the long term. If its just a one or 2 season thing with the aim of somehow making max money then maybe what they are doing is understandable but otherwise no. The unfortunate fact that this is being held abroad makes it even worse. Imagine how wierd it might be to see Pollard playing for Lahore and never having been there.

    Now secondly the thing is that the more important things are the sponsorships and the TV rights. For both it would have been better to hold it in UAE rather than Doha. UAE already has a world class cricketing infrastructure with quality state of the art stadiums and training facilities. Also as a location the country has a lot of attractive tourist and hang out spots where fans and importantly players can have a good time so that would have played a positive role because the foreign players would have had a good experience on and off the field and would have wanted to come again and most importantly PSL would have gooten a good rep due to word of mouth. Doha (Qatar is little apart from the city) just cannot compare with the UAE in that sense and I am afraid that the players might not be willing to come again regardless of the onfield experience. PCB waited so long to hold this and unfortunately it still seems to be a rushed event with not a lot of due diligence done regarding that which is a shame. Should have just waited out a bit more to hold it in UAE. We probably would have seen bigger crowds too and definitely would not have had to hold the whole tournament in a sub par ground which might be empty most of the times unless we can somehow attract the Indian contingent.

    The issue with sponsorships is an equally big talking point. None of the Pakistani corporate brands are willing to put in the necessar investment into domestic cricket. Haier is the only big investor and that too is due to lack of competition. When you have brands like Junaid Jamshed (which by all measures is an average sized brand) turning out to be tournament and international series sponsors you know that you have an issue. In recent times even PEPSI seems to have been going a bit cold on Pakistan cricket too and their overall investment seems to have reduced. Conglomerates like Engro, Dawood Group, Habib Group need to get into the game and the PCB needs to make a case to them to invest in PSL teams and also make a presentation to them to show them how they can benefit from such participation. Unless we can get these conglomerates and stop relying on jokes like JJ, Cool & Cool the PSL is going to die its own death.

    PCB's best bet of making a quick buck is somehow to get big names it can get and start a bidding war b/w PTV, Ten and Geo. And then somehow get Ten to make a competitive enough bid to get the rights because they are the only ones who can produce a quality broadcast in every aspect. We have had 10 years of domestic T20 tournaments and I still mantain that the best T20 tournament to watch on TV was the first one which Ten Sports did. In every aspect including camerawork and quality which says it all really as far as the GEO and PTV work is concerned. Infact I'd be happy even if TEN gets the rights at a slightly lower price. But I think PTV will get the rights and Nauman Niaz and his inept crew will ruin the whole league.

    Now finally and the reason why I think PSL will not be sustainable and is likely to go bust is because it is being run and organized by the PCB. You can bet that there is likely to be some scheduling issue, contracts issue or payments not going out on time etc etc which will kill the reputation of the league. I just cannot expect the PCB to be professional enough for this to last long.


    #MPGA

  21. #21
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    Pak cricket, has much bigger fan base, compared to BD and SL, not only in Pakistan but also overseas and that could be good selling point, if managed smartly. With economy and security situation improving rapidly in Pakistan, PSL will survive. Hope it will come back to Pakistan in 2-3 years is not unrealistic.

  22. #22
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    Quote Originally Posted by Pace90 View Post
    Pak cricket, has much bigger fan base, compared to BD and SL, not only in Pakistan but also overseas and that could be good selling point, if managed smartly. With economy and security situation improving rapidly in Pakistan, PSL will survive. Hope it will come back to Pakistan in 2-3 years is not unrealistic.
    BD has same population as Pak and its a one sport country, plus its team is doing well. I am sure BD has same if not bigger fan base as Pak.

  23. #23
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    It seems that the PCB have as much idea as your average fan.

  24. #24
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    One thing many people are not noticing is that the scale of PSL including prize money is more than IPL 1.

  25. #25
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    Quote Originally Posted by 11ShadyBrothers View Post
    One thing many people are not noticing is that the scale of PSL including prize money is more than IPL 1.
    IPL 1 was in a different world.

    Figures for 2008 are not relevant to 2016 but if PCB can guarantee the money. then that would be great.

    Lets see what individual contracts will be like. Right now top IPL contracts are bigger than the whole PSL prize moneey but our focus in the first seasons should be make it a success from viewership and cricket point of view so that its not a one season wonder type of league.


    #MPGA

  26. #26
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    I actually am financial expert

    Going through PCB's website, latest financial information available is from 2010 (so this is extremely outdated like think back to Ijaz Butt) and oh my goodness, these clowns got rid of the financials...http://www.pcb.com.pk/downloads/Annu...ort%202010.pdf It says page 54, but I don't even see it.

    If anyone has their financials for the last 2-3 years, I can break this down for you.

  27. #27
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    Quote Originally Posted by Lords View Post
    BD has same population as Pak and its a one sport country, plus its team is doing well. I am sure BD has same if not bigger fan base as Pak.
    It's not only population, it's cricket pedigree , which is the huge difference. BD is a young cricketing nation, Pak is not. Even people of my grandfathers age in Pakistan follow cricket and had played cricket at their time. Also here in USA, there is cricket teams of Pak descents in every town and huge number of followers , I'm sure even bigger in Uk and UAE, not many from BD, probably more from SL. Pak fan base is only second to India, it's huge. BD doesn't come close, not yet.

  28. #28
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    Quote Originally Posted by Joga Bonito View Post
    I actually am financial expert

    Going through PCB's website, latest financial information available is from 2010 (so this is extremely outdated like think back to Ijaz Butt) and oh my goodness, these clowns got rid of the financials...http://www.pcb.com.pk/downloads/Annu...ort%202010.pdf It says page 54, but I don't even see it.

    If anyone has their financials for the last 2-3 years, I can break this down for you.
    You can't just look at their financial statements and make any comments for their future.

    The financial success would be down to their operating model, the market (no. of viewers), spending power of the sponsors and partners (franchises)

  29. #29
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    Quote Originally Posted by Slog View Post
    IPL 1 was in a different world.

    Figures for 2008 are not relevant to 2016 but if PCB can guarantee the money. then that would be great.

    Lets see what individual contracts will be like. Right now top IPL contracts are bigger than the whole PSL prize moneey but our focus in the first seasons should be make it a success from viewership and cricket point of view so that its not a one season wonder type of league.
    I am just pointing out towards the fact that how IPL evolved in terms of financials. PSL is in its infancy and the only way is the way up.

  30. #30
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    Quote Originally Posted by Joga Bonito View Post
    I actually am financial expert

    Going through PCB's website, latest financial information available is from 2010 (so this is extremely outdated like think back to Ijaz Butt) and oh my goodness, these clowns got rid of the financials...http://www.pcb.com.pk/downloads/Annu...ort%202010.pdf It says page 54, but I don't even see it.

    If anyone has their financials for the last 2-3 years, I can break this down for you.
    Bonito, i dont how you can ascertain the success of PSL by looking at PCB's financial statements. I am a finance expert myself. Like i wrote before we need to know how much cash was invested and what are the expected inflows to make any sense.

  31. #31
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    With such a large population base and followings , it should be easy to have a sustainable financial base. Just need to have skilled folks managing it.

    I am assuming that second popular sports is way behind cricket in Pakistan.


    "If this happens I will swim across the Charles River! In winter!" -- OZGOD on NZ batting 6 sessions

  32. #32
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    People are overestimating large population of Pakistan by saying they will result in better TV rights deals. First of all we don't have paid TV subscriptions like SKy, Fox, Star Sports etc our matches are broadcasted on free channels and the only profit return for those channels is the TV ads that's why even home series of Pakistan against any major team (except india) didn't generate much revenue because of TV rights being sold at a low price and there is hardly any competition. Most of the time PTV Sport or Ten Sports get the TV rights and than they also sell secondary rights to each other to divide the price they paid.

    TV rights maybe a huge deal in countries like UK, Australia (because of paid tv subscription) and India (because of their huge population+paid tv channels) but in Pakistan it's not that big.

    One way it can be profitable if big companies who advertise a lot on TV like QMobile, Ufone, Telenor etc buy the teams instead of individuals it will give them free marketing of their brand and this will come as a profit return to their investment.
    Last edited by Strike Rate; 17th September 2015 at 18:13.


    " It is true, Pakistan cricket is not defined by planning, it is not defined by team work and it is not defined by an entire match. It is defined by moments, moments of inspiration, moments of magic, moments when the unsung become the sung, when the world starts rotating in the opposite direction, when the abnormal becomes the normal, when delusion becomes logic – it is when the stars align. "

  33. #33
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    Quote Originally Posted by 11ShadyBrothers View Post
    Bonito, i dont how you can ascertain the success of PSL by looking at PCB's financial statements. I am a finance expert myself. Like i wrote before we need to know how much cash was invested and what are the expected inflows to make any sense.
    It will give a good indication of how their current state looks and if their current recurring revenues/expenses are enough. I would then do a proforma analysis with the PSL.

  34. #34
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    Since PCB is behind it, I am sure it will fail.


    Misbah, Wahab, Junaid, Root, Williamson fan.
    T20 isn't Cricket

  35. #35
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    Quote Originally Posted by DrSchultz View Post
    Since PCB is behind it, I am sure it will fail.
    BTW most of things will be outsourced, so have some hope

  36. #36
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    Quote Originally Posted by Joga Bonito View Post
    It will give a good indication of how their current state looks and if their current recurring revenues/expenses are enough. I would then do a proforma analysis with the PSL.
    You can only do a proforma analysis if you have PCB's expected returns per centage for the upcoming years. Like i said, NPV or IRR is a better way of doing it. Proforma is totally useless as you will be taking non-current assets into account as well. Like for instance Gaddafi has no link to the success of PSL.

  37. #37
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    I've heard from a few sources top celebs from Pakistan will represent each team. Fawad Khan, Ali Zafar, Humaima etc. Good idea. This will be an amazing tournament.

  38. #38
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    Quote Originally Posted by Bullet Drive View Post
    I've heard from a few sources top celebs from Pakistan will represent each team. Fawad Khan, Ali Zafar, Humaima etc. Good idea. This will be an amazing tournament.
    Ali Zafar vs Fawad. Damn. Tough choices.

  39. #39
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    Well I remember hearing Zaka Ashraf claim PSL is worth more than $ 100 million. And he was apparently making those claims on basis of some financial plans drawn up by ex ICC CEO and current CSA Chief Executive Haroon Lorgat.

    If PCB is make even ¼ of those claimed amount in some 3-4 years' cycle, we can consider PSL as a success

    Sent from my XT1022 using Tapatalk

  40. #40
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    Quote Originally Posted by Bullet Drive View Post
    I've heard from a few sources top celebs from Pakistan will represent each team. Fawad Khan, Ali Zafar, Humaima etc. Good idea. This will be an amazing tournament.
    Just wondering???
    IPL is called tamasha league and what not because bollywood and other celebrities are part of it.
    Now PSL is following roughly same model (if ur information is genuine) and you already assume it will be amazing tournament already???
    Not sure whats difference in terms of tamasha factor between both

  41. #41
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    Quote Originally Posted by mp812rediff View Post
    Just wondering???
    IPL is called tamasha league and what not because bollywood and other celebrities are part of it.
    Now PSL is following roughly same model (if ur information is genuine) and you already assume it will be amazing tournament already???
    Not sure whats difference in terms of tamasha factor between both
    Well PSL is not only cricket. Its entertainment, and that's how it should be. Marketing of this tourny v important, and it will be marketed well if likes of Fawad & Ali are on board.

  42. #42
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    Quote Originally Posted by Bullet Drive View Post
    I've heard from a few sources top celebs from Pakistan will represent each team. Fawad Khan, Ali Zafar, Humaima etc. Good idea. This will be an amazing tournament.
    The PCB seems to be on the right track ,they have the best PR team on board , Encyclomedia PR is handling their affairs , that lady Ammara hikmat is a genius and very very pretty too.

  43. #43
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    Quote Originally Posted by ethan hunt View Post
    The PCB seems to be on the right track ,they have the best PR team on board , Encyclomedia PR is handling their affairs , that lady Ammara hikmat is a genius and very very pretty too.
    Agree entirely. She is absolutely superb. Best PR team, and that's why I said this tournament will be marketed amazingly.

  44. #44
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    Quote Originally Posted by ethan hunt View Post
    The PCB seems to be on the right track ,they have the best PR team on board , Encyclomedia PR is handling their affairs , that lady Ammara hikmat is a genius and very very pretty too.
    Agree. She's indeed beauty with brain. PSL is setting itself up for success on PR, marketing and ultimately cricketing front.

  45. #45
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    Quote Originally Posted by 11ShadyBrothers View Post
    I am just pointing out towards the fact that how IPL evolved in terms of financials. PSL is in its infancy and the only way is the way up.
    You would need to take into account inflation in India between 2008 and now, and the difference in value of $1 in 2008 and now to ascertain whether the money being offered in PSL is equal to IPL season 1 or not.

  46. #46
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    Quote Originally Posted by 11ShadyBrothers View Post
    You can only do a proforma analysis if you have PCB's expected returns per centage for the upcoming years. Like i said, NPV or IRR is a better way of doing it. Proforma is totally useless as you will be taking non-current assets into account as well. Like for instance Gaddafi has no link to the success of PSL.
    Good point, I missed the title of the post, I thought he meant does "PCB" have a sustainable financial model, so I was thinking of PCB but he means PSL. That's really hard because as already mentioned there isn't too much info on it.

    Yeah IRR would be best in this case to assess the sustainability of PSL. Would do it like how you would do an LBO.

    Seeing how poor the PCB disclosures are, I wouldn't imagine having much luck finding it on PSL. Just out of curiosity what do you do?
    Last edited by Joga Bonito; 18th September 2015 at 00:45.

  47. #47
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    Quote Originally Posted by Joga Bonito View Post
    Good point, I missed the title of the post, I thought he meant does "PCB" have a sustainable financial model, so I was thinking of PCB but he means PSL. That's really hard because as already mentioned there isn't too much info on it.

    Yeah IRR would be best in this case to assess the sustainability of PSL. Would do it like how you would do an LBO.

    Seeing how poor the PCB disclosures are, I wouldn't imagine having much luck finding it on PSL. Just out of curiosity what do you do?
    PCB try to keep things 'confidential' to hide its incompetency.

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    I think it deserves a try imo if Pakistan was safe it would had been a success for sure as they have right business houses to make it a success.
    Plus its 20 days if i'm not wrong that's just a vacation imo they can pull it off but some amount of realistic expectation should be there.


    In cricket, my superhero is Sachin Tendulkar. He has always been my hero.
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  49. #49
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    Quote Originally Posted by Sidilicious View Post
    You would need to take into account inflation in India between 2008 and now, and the difference in value of $1 in 2008 and now to ascertain whether the money being offered in PSL is equal to IPL season 1 or not.
    Yeah, well thats correct. Even if i use TMV for this purpose you can clearly see that PSL's first season money exceeds IPL's first season money.

  50. #50
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    TVM not TMV*

  51. #51
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    Quote Originally Posted by Joga Bonito View Post
    Good point, I missed the title of the post, I thought he meant does "PCB" have a sustainable financial model, so I was thinking of PCB but he means PSL. That's really hard because as already mentioned there isn't too much info on it.

    Yeah IRR would be best in this case to assess the sustainability of PSL. Would do it like how you would do an LBO.

    Seeing how poor the PCB disclosures are, I wouldn't imagine having much luck finding it on PSL. Just out of curiosity what do you do?
    Exactly. I doubt there would be any information available any way in the future as well. IRR would be best and yes the point that interest rate is all time low in Pakistan, this makes the investment as viable as ever. I am a student right now majoring in Accounting and Finance.

  52. #52
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    Quote Originally Posted by 11ShadyBrothers View Post
    Yeah, well thats correct. Even if i use TMV for this purpose you can clearly see that PSL's first season money exceeds IPL's first season money.
    But TVM of IPL's first season would depend on the discount rate you use. That discount rate would depend on various inputs.

    What was IPL's prize money in season 1? PSL is $1m?

  53. #53
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    Quote Originally Posted by Sidilicious View Post
    But TVM of IPL's first season would depend on the discount rate you use. That discount rate would depend on various inputs.

    What was IPL's prize money in season 1? PSL is $1m?
    From what i found it was 4.8 crore. Discount rate i think the one suitable would be the interest rate set by your state bank/reserve. Its 6 per cent in Pakistan nowadays. All time low.

  54. #54
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    Not sure what was discount rate in india in 2008. Anyway, i didnt calculate TVM. I just made a guess from the raw figures.

  55. #55
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    Quote Originally Posted by 11ShadyBrothers View Post
    From what i found it was 4.8 crore. Discount rate i think the one suitable would be the interest rate set by your state bank/reserve. Its 6 per cent in Pakistan nowadays. All time low.
    But technically, you would have to use either the annual inflation rate (i.e inflation rate of each year) in India/Pak from 2008 to 2015, to use as the discount rate.
    or
    The Interest rate for each year set by the National Monetary authority which sets the interest rate. Though, I dont think this will land us the correct value, as we are not looking for opportunity cost. We are comparing an event that has actually happened.

    In addition to this the first few editions in the IPL, the players were played in $. i.e all amounts were set in $. In that case we might even have to account for the exchange rate. Would the $ interest rate matter in that scenario?

  56. #56
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    Quote Originally Posted by Sidilicious View Post
    But technically, you would have to use either the annual inflation rate (i.e inflation rate of each year) in India/Pak from 2008 to 2015, to use as the discount rate.
    or
    The Interest rate for each year set by the National Monetary authority which sets the interest rate. Though, I dont think this will land us the correct value, as we are not looking for opportunity cost. We are comparing an event that has actually happened.

    In addition to this the first few editions in the IPL, the players were played in $. i.e all amounts were set in $. In that case we might even have to account for the exchange rate. Would the $ interest rate matter in that scenario?
    Why would you want to use the inflation rate as the discount rate? The discount rate is the cost of capital you entail because of giving up another option of investment you could have invested upon if you wouldn't have gone for the project in question.

    I think what we need to do is to simply compare PVs. For PVs, the only way i think we can calculate is to use the interest rates set by the monetary body. Even if the event has actually happened, that doesn't eliminates the opportunity cost that is that the prize money could have been invested for interest by BCCI in a bank (just an example).

    Even if they were given in dollars we can use the valuation of Indian rupees at that time against the dollar which came out 4.8 crore for the prize money.

  57. #57
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    Quote Originally Posted by 11ShadyBrothers View Post
    Why would you want to use the inflation rate as the discount rate? The discount rate is the cost of capital you entail because of giving up another option of investment you could have invested upon if you wouldn't have gone for the project in question.

    I think what we need to do is to simply compare PVs. For PVs, the only way i think we can calculate is to use the interest rates set by the monetary body. Even if the event has actually happened, that doesn't eliminates the opportunity cost that is that the prize money could have been invested for interest by BCCI in a bank (just an example).

    Even if they were given in dollars we can use the valuation of Indian rupees at that time against the dollar which came out 4.8 crore for the prize money.
    Hmm. good point. When comparing two cash amounts in two different years would be see how much Rs 1 that was invested in 2008 buy in 2015. Also since the project was in India you would use India's interest rate. The $ interest doesn't matter.

    We could use India's RBI interest rate from 2008-2015 (taking an annual rate for each year).

    Assuming a 10% interest rate each year from 2008-2015 - Re 1 would buy 1.1 in 09, 1.21 in 2010.....1.94 in 2015. Then we would convert the $ value of the IPL prize money in 2008 to Rs. value using the historical interest rate of 2008. Then multiply by 1.94 (or whatever the number is given exact interest rates), and convert it back to $ given today's Rs to $ conversion rate.

    Given the fact that Indian Rs has fallen between 2008 and 2015, that could be a deciding factor in this calculation and you might then be right.

    Damn, I love finance!

  58. #58
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    Quote Originally Posted by Slog View Post
    Didn't IPL make operating losses for its first few seasons too. I am sure it made so in the 2nd season after the shift to South Africa. So in a financial sense, not making a profit in Season 1 will not be end of the world.

    The problem I see is the lack of context. Will these new teams be in for the long haul to the point where fans may start identifying with them or are they just going to disappear in a few seasons. In that respect the current teams like Peshawar, Karachi Dolphins, Lahore Lions and ofcourse Sialkot Stallions do have some fan support and people might turn on the TV to just watch them. But with these new teams will people even identify with them? Considering that there are 5 teams and that the PCB has given regional associations no say in these teams why not just have the teams named after the 4 provinces and a Federal Areas Team? Or better yet get rid of Quetta and add Sialkot or just add Sialkot and make it 6 teams. PCB needs to seriously ask itself that why is it holding this tournament and does it envisage it something for the long term. If its just a one or 2 season thing with the aim of somehow making max money then maybe what they are doing is understandable but otherwise no. The unfortunate fact that this is being held abroad makes it even worse. Imagine how wierd it might be to see Pollard playing for Lahore and never having been there.

    Now secondly the thing is that the more important things are the sponsorships and the TV rights. For both it would have been better to hold it in UAE rather than Doha. UAE already has a world class cricketing infrastructure with quality state of the art stadiums and training facilities. Also as a location the country has a lot of attractive tourist and hang out spots where fans and importantly players can have a good time so that would have played a positive role because the foreign players would have had a good experience on and off the field and would have wanted to come again and most importantly PSL would have gooten a good rep due to word of mouth. Doha (Qatar is little apart from the city) just cannot compare with the UAE in that sense and I am afraid that the players might not be willing to come again regardless of the onfield experience. PCB waited so long to hold this and unfortunately it still seems to be a rushed event with not a lot of due diligence done regarding that which is a shame. Should have just waited out a bit more to hold it in UAE. We probably would have seen bigger crowds too and definitely would not have had to hold the whole tournament in a sub par ground which might be empty most of the times unless we can somehow attract the Indian contingent.

    The issue with sponsorships is an equally big talking point. None of the Pakistani corporate brands are willing to put in the necessar investment into domestic cricket. Haier is the only big investor and that too is due to lack of competition. When you have brands like Junaid Jamshed (which by all measures is an average sized brand) turning out to be tournament and international series sponsors you know that you have an issue. In recent times even PEPSI seems to have been going a bit cold on Pakistan cricket too and their overall investment seems to have reduced. Conglomerates like Engro, Dawood Group, Habib Group need to get into the game and the PCB needs to make a case to them to invest in PSL teams and also make a presentation to them to show them how they can benefit from such participation. Unless we can get these conglomerates and stop relying on jokes like JJ, Cool & Cool the PSL is going to die its own death.

    PCB's best bet of making a quick buck is somehow to get big names it can get and start a bidding war b/w PTV, Ten and Geo. And then somehow get Ten to make a competitive enough bid to get the rights because they are the only ones who can produce a quality broadcast in every aspect. We have had 10 years of domestic T20 tournaments and I still mantain that the best T20 tournament to watch on TV was the first one which Ten Sports did. In every aspect including camerawork and quality which says it all really as far as the GEO and PTV work is concerned. Infact I'd be happy even if TEN gets the rights at a slightly lower price. But I think PTV will get the rights and Nauman Niaz and his inept crew will ruin the whole league.

    Now finally and the reason why I think PSL will not be sustainable and is likely to go bust is because it is being run and organized by the PCB. You can bet that there is likely to be some scheduling issue, contracts issue or payments not going out on time etc etc which will kill the reputation of the league. I just cannot expect the PCB to be professional enough for this to last long.
    Except KKR and RR no other IPL team made profits in first 2-3 years.BCCI ofcourse made profits.The point is that all teams are owned by deep pocketed individuals or companies which are worth more than billion USD and hence can absorb the losses and continue.

    The reason SLPL BPL folded because the team owners couldnt absorb the losses.Dont forget we are talking millions of dollars here and the ability to absorb that for years.

    Whether PSL is sustainable or not will depend on the fact that if the team owners are ready to absorb loss of millions of dollars and keep running the teams.


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  59. #59
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    Quote Originally Posted by cricketjoshila View Post
    Except KKR and RR no other IPL team made profits in first 2-3 years.BCCI ofcourse made profits.The point is that all teams are owned by deep pocketed individuals or companies which are worth more than billion USD and hence can absorb the losses and continue.

    The reason SLPL BPL folded because the team owners couldnt absorb the losses.Dont forget we are talking millions of dollars here and the ability to absorb that for years.

    Whether PSL is sustainable or not will depend on the fact that if the team owners are ready to absorb loss of millions of dollars and keep running the teams.
    Very good point with inbuilt question in your reply. PSL franchises can bear losses? lets see

  60. #60
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    IPl 1 Prize Money - Rs 12 crore
    Source -

    Average RBI interest rate - 7%
    We can do a more accurate analysis if we follow the following source. But it looks like its some where around 7%.
    http://www.allbankingsolutions.com/B...te-India.shtml

    Current Indian Rs to $ value - 1 Re = 0.0152$

    Therefore Re 1 in 2008 = 1.605

    Therefore Rs 120,000,000 in 2008 = Rs 192,693,777 today

    Rs 192,693,777 = $2,928,945 = $2.9 m

    PSL's prize money is $1mn.

    Did I get anything wrong? I thought the prize money would be closer.

  61. #61
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    Quote Originally Posted by cricketjoshila View Post
    Except KKR and RR no other IPL team made profits in first 2-3 years.BCCI ofcourse made profits.The point is that all teams are owned by deep pocketed individuals or companies which are worth more than billion USD and hence can absorb the losses and continue.

    The reason SLPL BPL folded because the team owners couldnt absorb the losses.Dont forget we are talking millions of dollars here and the ability to absorb that for years.

    Whether PSL is sustainable or not will depend on the fact that if the team owners are ready to absorb loss of millions of dollars and keep running the teams.
    I am sure IPL - the independent entity itself made a loss in the first 2 seasons atleast. BCCI is seperate.

    I remember Modi's exact words from a CNN interview after the IPL was shifted that 'Yes. We are making an operating loss but the show needs to go on. Finances will take care of themselves in future seasons."

    The organizing and logistical costs as all borne by IPL


    #MPGA

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    Quote Originally Posted by Slog View Post
    I am sure IPL - the independent entity itself made a loss in the first 2 seasons atleast. BCCI is seperate.

    I remember Modi's exact words from a CNN interview after the IPL was shifted that 'Yes. We are making an operating loss but the show needs to go on. Finances will take care of themselves in future seasons."

    The organizing and logistical costs as all borne by IPL
    IPL the BCCI subsidiary never made a loss.The teams made operating losses.The profit that IPL made in 2009 was lesser than 2008 but it was still profitable.IPL itself never made any losses AFAIK.


    aaj mujh ko bahut burā kah kar
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    Quote Originally Posted by 11ShadyBrothers View Post
    Exactly. I doubt there would be any information available any way in the future as well. IRR would be best and yes the point that interest rate is all time low in Pakistan, this makes the investment as viable as ever. I am a student right now majoring in Accounting and Finance.
    Best of luck to you in your major!

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    If PSL can be set up like IPL in the sense that owners and not the BCCI own it/run it, then I can imagine it to run quite well. Businessmen are usually better at making money than Governmental "not-for-profit" organizations like PCB

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    Quote Originally Posted by Sidilicious View Post
    Hmm. good point. When comparing two cash amounts in two different years would be see how much Rs 1 that was invested in 2008 buy in 2015. Also since the project was in India you would use India's interest rate. The $ interest doesn't matter.

    We could use India's RBI interest rate from 2008-2015 (taking an annual rate for each year).

    Assuming a 10% interest rate each year from 2008-2015 - Re 1 would buy 1.1 in 09, 1.21 in 2010.....1.94 in 2015. Then we would convert the $ value of the IPL prize money in 2008 to Rs. value using the historical interest rate of 2008. Then multiply by 1.94 (or whatever the number is given exact interest rates), and convert it back to $ given today's Rs to $ conversion rate.

    Given the fact that Indian Rs has fallen between 2008 and 2015, that could be a deciding factor in this calculation and you might then be right.

    Damn, I love finance!
    Yep. You got it. I love finance too, man. Accounting sucks tho. Dont like it et all.

    Quote Originally Posted by Sidilicious View Post
    IPl 1 Prize Money - Rs 12 crore
    Source -

    Average RBI interest rate - 7%
    We can do a more accurate analysis if we follow the following source. But it looks like its some where around 7%.
    http://www.allbankingsolutions.com/B...te-India.shtml

    Current Indian Rs to $ value - 1 Re = 0.0152$

    Therefore Re 1 in 2008 = 1.605

    Therefore Rs 120,000,000 in 2008 = Rs 192,693,777 today

    Rs 192,693,777 = $2,928,945 = $2.9 m

    PSL's prize money is $1mn.

    Did I get anything wrong? I thought the prize money would be closer.
    There is a mistake. You quoted IPL's prize money as 12 crore which is true if you include all of the IPL's prize money. Here we are just comparing the final's winner money. Which is 4.8 crore.

    I havent checked your caluclation method. I will get back to you soon.

  66. #66
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    Quote Originally Posted by Joga Bonito View Post
    Best of luck to you in your major!
    Thanks bonito.

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    Quote Originally Posted by 11ShadyBrothers View Post
    Exactly. I doubt there would be any information available any way in the future as well. IRR would be best and yes the point that interest rate is all time low in Pakistan, this makes the investment as viable as ever. I am a student right now majoring in Accounting and Finance.
    Good luck. My major is HR & minor marketing.

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    Quote Originally Posted by cricketjoshila View Post
    Except KKR and RR no other IPL team made profits in first 2-3 years.BCCI ofcourse made profits.The point is that all teams are owned by deep pocketed individuals or companies which are worth more than billion USD and hence can absorb the losses and continue.

    The reason SLPL BPL folded because the team owners couldnt absorb the losses.Dont forget we are talking millions of dollars here and the ability to absorb that for years.

    Whether PSL is sustainable or not will depend on the fact that if the team owners are ready to absorb loss of millions of dollars and keep running the teams.
    You are missing a point here. No body cares about the yearly profits as these owners are not looking for an income. Look at the increase in Brand value. They bought these franchises for 100 million USD and they are worth more than 250 million based on the recent evaluation. The brand value is only going to go up.

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    PSL will follow KSE, real estates, Lollywood, inaami shows on tv etc. No one will show losses. #BlackMoney2WhiteMoney


    Serious Sport has nothing to do with fair play... it is war minus the shooting.

  70. #70
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    Quote Originally Posted by 11ShadyBrothers View Post
    Yep. You got it. I love finance too, man. Accounting sucks tho. Dont like it et all.



    There is a mistake. You quoted IPL's prize money as 12 crore which is true if you include all of the IPL's prize money. Here we are just comparing the final's winner money. Which is 4.8 crore.

    I havent checked your caluclation method. I will get back to you soon.
    Okay, i did the calculations.

    The IPL Prize money is 4.8 crore.

    Taking it as PV i will calculate FV. I took 7 per cent as the interest rate. I did it on a financial calculator. But for your and anyone else who is reading's understanding i am doing the manual calculation.

    FV=4.8(1+0.7)^7

    That came out to be 77000000 (that is 7.7 crore).

    Now i converted this to INR using today's USD to INR rate that is 65.78.

    The resulting value came out to be 1.17 million.

    So, PSL's prize money is 1 million and IPL 1's prize money is 1.17 taking time value of money into account. Not bad et all actually.
    @Slog @#GreenRoars might interest you as well.

  71. #71
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    Quote Originally Posted by Sami92 View Post
    Good luck. My major is HR & minor marketing.
    Thanks mate. HR and marketing is excellent. USAID is something you should definitely try for.

  72. #72
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    Quote Originally Posted by 11ShadyBrothers View Post
    Yep. You got it. I love finance too, man. Accounting sucks tho. Dont like it et all.



    There is a mistake. You quoted IPL's prize money as 12 crore which is true if you include all of the IPL's prize money. Here we are just comparing the final's winner money. Which is 4.8 crore.

    I havent checked your caluclation method. I will get back to you soon.
    I don't think you should look at the prize money. I believe the prize money was just 6 million last year. That's a pittance compared to the amount each team spent on their players. There are many players making 1 million USD or more in a team. The more you spend on the players, the better players you get. The A list Australians and South Africans get paid more than a million. The diamond category pays only 100K and even domestic players in IPL make more than that.

  73. #73
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    Quote Originally Posted by rhony View Post
    I don't think you should look at the prize money. I believe the prize money was just 6 million last year. That's a pittance compared to the amount each team spent on their players. There are many players making 1 million USD or more in a team. The more you spend on the players, the better players you get. The A list Australians and South Africans get paid more than a million. The diamond category pays only 100K and even domestic players in IPL make more than that.
    I understand but kindly look at the context of the discussion.

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    Quote Originally Posted by 11ShadyBrothers View Post
    I understand but kindly look at the context of the discussion.
    Sorry about that. My reply was intended for another post actually. Fat fingers!!!

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    Quote Originally Posted by rhony View Post
    Sorry about that. My reply was intended for another post actually. Fat fingers!!!
    Hahaha dont be sorry. Its perfectly fine.

  76. #76
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    Quote Originally Posted by 11ShadyBrothers View Post
    Okay, i did the calculations.

    The IPL Prize money is 4.8 crore.

    Taking it as PV i will calculate FV. I took 7 per cent as the interest rate. I did it on a financial calculator. But for your and anyone else who is reading's understanding i am doing the manual calculation.

    FV=4.8(1+0.7)^7

    That came out to be 77000000 (that is 7.7 crore).

    Now i converted this to INR using today's USD to INR rate that is 65.78.

    The resulting value came out to be 1.17 million.

    So, PSL's prize money is 1 million and IPL 1's prize money is 1.17 taking time value of money into account. Not bad et all actually.
    @Slog @#GreenRoars might interest you as well.
    Very simple assumption. Dont cite this example in an investment banking interview trust me

    But yes you are right. Problem is that I would look at in whole dollar amounts only. Wasnt the winner prize money of 4.8cr INR still translate to $1million in 2008 using the exchange rates of the time?


    #MPGA

  77. #77
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    Quote Originally Posted by Slog View Post
    Very simple assumption. Dont cite this example in an investment banking interview trust me

    But yes you are right. Problem is that I would look at in whole dollar amounts only. Wasnt the winner prize money of 4.8cr INR still translate to $1million in 2008 using the exchange rates of the time?
    I attribute it to the lack of data available slog. You make do with what you have.

    It would translate to 1.06 million in 2008. However, due to inflation and due to the simple financial belief that money loses its 'value' with time. We have to take TVM into account.

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    Quote Originally Posted by rhony View Post
    You are missing a point here. No body cares about the yearly profits as these owners are not looking for an income. Look at the increase in Brand value. They bought these franchises for 100 million USD and they are worth more than 250 million based on the recent evaluation. The brand value is only going to go up.
    No one is selling.These are trophies for these people because they have other billion dollar businesses where they make millions or even billions.So these losses dont matter to them.The point is to find such individuals who will put in the millions and not worry about profits.SLPL BPL didnt find such people.


    aaj mujh ko bahut burā kah kar
    aap ne naam to liyā merā
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  79. #79
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    Quote Originally Posted by 11ShadyBrothers View Post
    Yep. You got it. I love finance too, man. Accounting sucks tho. Dont like it et all.



    There is a mistake. You quoted IPL's prize money as 12 crore which is true if you include all of the IPL's prize money. Here we are just comparing the final's winner money. Which is 4.8 crore.

    I havent checked your caluclation method. I will get back to you soon.
    The total prize money of PSL is 1mn.

    The tournament will carry collective prize money of up to $1 million (Dhs3.673m).
    http://sport360.com/article/internat...n-super-league

    So if we are taking the total prize money of PSL then its only fair to take the total prize money of IPL 1 which was 12crore.


    aaj mujh ko bahut burā kah kar
    aap ne naam to liyā merā
    -----Jaun Eliya

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    Quote Originally Posted by 11ShadyBrothers View Post
    Okay, i did the calculations.

    The IPL Prize money is 4.8 crore.

    Taking it as PV i will calculate FV. I took 7 per cent as the interest rate. I did it on a financial calculator. But for your and anyone else who is reading's understanding i am doing the manual calculation.

    FV=4.8(1+0.7)^7

    That came out to be 77000000 (that is 7.7 crore).

    Now i converted this to INR using today's USD to INR rate that is 65.78.

    The resulting value came out to be 1.17 million.

    So, PSL's prize money is 1 million and IPL 1's prize money is 1.17 taking time value of money into account. Not bad et all actually.
    @Slog @#GreenRoars might interest you as well.
    MashALLAH that's handsome amount of money.


    Eat, Sleep, Back The Team....Repeat!


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