PSL - a homegrown global brand

PSL is a success story which every Pakistani should be proud of. Fifth season (PSL 2020) has been fully hosted in Pakistan with packed stadiums, although not any more due to COVID-19; but the journey was not as smooth as it appears today. It took years of efforts and risks by a few to make PSL a homegrown international brand.

PSL has developed into a brand due its commercial value. And behind the scenes, commerce is running the show as its spillover beyond cricket is much bigger than PSL itself.

PCB was trying for years - since 2011 - to create something similar to IPL for local market; but lack of commercial interest owing to security and other risks remained a hurdle. The major revenue earner is broadcast rights on which Ten Sports had a virtually monopoly. For the first three seasons, it offered broadcast rights at $1 million, which was too little an amount. PCB came up with an alternate strategy and instead offered it to companies like Starcom and GroupM.

Blitz took the risk and offered $8.7 million for broadcast rights of first three seasons in Pakistan. International broadcasting rights were sold at an additional $4.5 million. Revenue from broadcasting helped the ball get rolling. Overall, broadcasting and title sponsorship by HBL fetched around $20-25 million for first three-year rights. Franchises fee and gate money is in addition to it.

In early seasons, cost was high as the saga was staged in Dubai. PCB had to pay for renting stadium, boarding and lodging cost, which were much higher than domestic. Of course, staging the initial seasons in Dubai had its benefit, as it brought international exposure, in addition to better production and other facilities. The companies hired for production had Indian staff. As a result, although Dubai was more expensive, it produced better results and ensured wider reach, making the brand a resounding success (although in season four, all Pakistan matches had equally good production quality compared to matches in the UAE).

Beginning fifth season, the luxuries of the UAE are no longer available. The management has worked hard and smart to build the brand value. IPL, Super Bowl and others are much bigger brands, and in comparison, PSL has a long way to cover. It must be remembered that the commercial interest is generated not just by cricket but due to entertainment around cricket.

There were excellent marketing efforts by PCB and others in early days. PSL anthem, for example, was a success. Consumer engagement on ground, digital and electronic mediums created the much-needed hype for the brand. The trophy itself was a brand created around Swarovski and in first four seasons, the trophy activations added further hype to the event.

For example, before the matches commence, celebrations surrounding opening ceremony took a life of its own and was well taken by global audience. Previously, IPL used to have indoor ceremonies. But learning from the PSL success story, the brand from next-door held eight ceremonies in eight different stadiums. It's all about engagement.

That is why global brands and stars became part of PSL ceremonies. As a result, PSL brand has gained much hype, and some might argue even more than the cricket matches itself. It has also helped lay foundations of a soft image of the country, as the state tries to pivot brand Pakistan to attract tourism and foreign investment.

The brands associated with PSL - such as HBL - seek exposure leverage against the spend on advertisement. The rule of thumb is to get 3-4 times marketing exposure against the spend. Independent evaluations are suggesting that brands received 10-20 times exposure. Did PSL have a brilliant beginners' luck, or will it succeed in maintaining initial trajectory?

The perceived brand value of PSL worked for PCB last year during the bidding process for fourth to sixth season. This was demonstrated by the fact that the rights were sold at $63-64 million for PSL 4-6 seasons - three times of the value for first three seasons. Each right went on higher multiple from broadcast to tile sponsorship to insatdia. With all matches of fifth season (PSL2020) held in Pakistan, other benefits of bringing cricket back home are much higher.

PCB revenues multiplied with higher rights value. Direct cost of managing reduced as hosting in Pakistan is cheaper than in Dubai. The euphoria is also greater as stadiums were packed and sometimes oversold. With improved security situation, international players of greater stature have agreed to visit Pakistan. Previously, it had been a challenge to even bring second tier players for matches hosted here. The additional cost of security is being borne by provincial government and other agencies. The benefits of soft image for the economy are huge too. Hence, it makes sense for authorities to spend additional bucks.

Having said that, PCB must tread with care to manage the brand PSL. If commercial viability of the PSL brand is not maintained, everything else could be compromised. Opening ceremony this year was a disaster. TV production quality has suffered as well. Ratings are reportedly down by 15 percent. This could impact future valuation. There are learnings from fifth season (the first held fully at home) to improve things in sixth. Thereafter, the bidding from seventh to ninth season will take place. The managers need to evaluate what is the cost of shortcomings in opening ceremony, of lower media engagements, communications issues, etc., to the brand value. If the PSL brand value suffers, the broader advantages to the economy could hurt too.