PSL as a public listed company on the Stock Exchange? A good idea?

[Savak]

In a recent interview on tv, Sethi mentioned that he plans for PSL to be listed on the KSE100 Index enabling the nation to invest in its own asset, product i.e. the PSL in a large scale manner and giving the PCB a huge independent revenue stream enabling it to inject massive investments into Pakistani Cricket. This will also allow for accountability for the board, directors, officers, audited financials and even more tranparency.

But he said that this will require special permission from the govt and the parliament.

Do you guys believe this is a good idea?

 

[Slog]

To be listed you need to be transparent about your finances and open the books to the general public. Also all this information needs to be audited

No way PCB will want that to happen

 

[Savak]

To be listed you need to be transparent about your finances and open the books to the general public. Also all this information needs to be audited

No way PCB will want that to happen

The PCB is already being audited by its own chosen external auditors E&Y, its own internal auditors and by the Public Accounts Committee in the National Assembly. Don't think audits are going to really scare them.

 

[Convict]

I think its a bad idea because once you have shareholders they and not the PCB will control the PSL.

 

[cricketjoshila]

To be listed you need to be transparent about your finances and open the books to the general public. Also all this information needs to be audited

No way PCB will want that to happen

Has PSL declared its figures for PSL2?

 

[rhony]

How does this even work? A company listed but only operates 6 weeks in a year? I thought you need quarterly share holder calls for publicly listed companies. The biggest revenue generator, the tv rights usually are a multi year contract. Where is the quarterly growh in that case? Also the uncertainty surrounding the venues is an issue.

 

[sshakir411]

To be listed you need to be transparent about your finances and open the books to the general public. Also all this information needs to be audited

No way PCB will want that to happen

Also, don't you have to be of a certain size e.g $500 Million and over to qualify to be listed? That's how it is everywhere else.

 

[Savak]

If it is listed, I can guarantee you the nation will get behind the PSL and will invest in the Asset as their own asset. This is a wonderful plan and Sethi should ignore all the negative downers like he has already done and go ahead with it.

 

[fawad_wellwisher]

Sethi and his big mouth. Half of what he says is hyperbole!

 

[Varun]

So much naatak over a T20 league, heck...

 

[Slog]

Also, don't you have to be of a certain size e.g $500 Million and over to qualify to be listed? That's how it is everywhere else.

As per new regulations from last year I believe there has to be three years of profitability but prior to that no. Exemptions can be taken so that's not a big issue I believe

 

[fawad_wellwisher]

Also, don't you have to be of a certain size e.g $500 Million and over to qualify to be listed? That's how it is everywhere else.

Or Sethi and co. could list PSL as a penny stock and then the insiders use pump and dump schemes to make themselves profitable.

 

[cricketjoshila]

As per new regulations from last year I believe there has to be three years of profitability but prior to that no. Exemptions can be taken so that's not a big issue I believe

What is the market cap of the most valuable company on KSE?

 

[cricketjoshila]

If it is listed, I can guarantee you the nation will get behind the PSL and will invest in the Asset as their own asset. This is a wonderful plan and Sethi should ignore all the negative downers like he has already done and go ahead with it.

Is PSL valued at 500mn or 1bn? Sethi changes the valuation like his clothes.Stock exchanges wont work like that.

 

[R3verse Swing]

With KSE being the best performing stock market in the SC since 2000, it makes absolute sense to float PSL on the stock market.

Market valuation will be determined at time of IPO.

PSL will become the richest T20 league in years to come; would be great if PSL shares would offer dividends annually.

 

[Bhaijaan]

Being the 2nd best T20 league in the world and with potential to upstage IPL as the best in the world, PSL must think and look to get listed within next 3 years. The entire nation will own shares and with a billion dollar in the kitty PSL will be able to comfortably take away all the big names in world cricket and even have its own window in the international calendar.

Once again a great idea Savak bro.

 

[Rishta Aunty]

Anyone with an iota of financial knowledge will know that this idea is extremely risky. A publically listed company is only beholden to the wishes of it's shareholders and the vagaries of the market; all these warm fuzzy things like bringing cricket back home will find no place.

It's particularly dangerous since we will have to often make financially unpopular but politically popular decisions to help bring cricket back to Pakistan. Don't see how the market will react positively to that tbh.

 

[fasihulhaq94]

If it is listed, I can guarantee you the nation will get behind the PSL and will invest in the Asset as their own asset. This is a wonderful plan and Sethi should ignore all the negative downers like he has already done and go ahead with it.

lol the nation will invest in PSL. 90% of the shares will be taken up by the major business syndicates who then effectively will control the league

 

[Barragan]

This is a very bad idea because shareholders generally want money and profits from their investments.

Since intl. players do draw a lot of attention, it could mean the shareholders decide to increase the intl. cap to 5 or 6 players per XI or maybe even more and the pcb wouldn't have much power to stop it.

They could eventually even change the name to "super league" and cut out the Pakistan.

 

[Savak]

lol the nation will invest in PSL. 90% of the shares will be taken up by the major business syndicates who then effectively will control the league

Business Syndicates are not Pakistanis? The IPL owners are not Indians who want the very best for their Franchise?

 

[Savak]

This is a very bad idea because shareholders generally want money and profits from their investments.

Since intl. players do draw a lot of attention, it could mean the shareholders decide to increase the intl. cap to 5 or 6 players per XI or maybe even more and the pcb wouldn't have much power to stop it.

They could eventually even change the name to "super league" and cut out the Pakistan.

The Shareholders will do what is best for the business

 

[Barragan]

The Shareholders will do what is best for the business

I literally said that in the post.

 

[Savak]

I literally said that in the post.

So why is that bad for the franchise and the players and for cricket then?

Had our domestic regions and departments been business minded, it would be much better

 

[Barragan]

So why is that bad for the franchise and the players and for cricket then?

Had our domestic regions and departments been business minded, it would be much better

Did you read my post?

 

[Savak]

Did you read my post?

Yes, you argued against PCB taking the PSL on the stock exchange would be a bad move and the shareholders, directors will not keep the best interests of Pakistani Cricket and Cricketers at heart

 

[Barragan]

Yes, you argued against PCB taking the PSL on the stock exchange would be a bad move and the shareholders, directors will not keep the best interests of Pakistani Cricket and Cricketers at heart

Yeah, pretty much.

 

[Barragan]

Yes, you argued against PCB taking the PSL on the stock exchange would be a bad move and the shareholders, directors will not keep the best interests of Pakistani Cricket and Cricketers at heart

Gave examples of what might happen is well.

 

[Gotham Cronie]

I think its a bad idea because once you have shareholders they and not the PCB will control the PSL.

Anyone with an iota of financial knowledge will know that this idea is extremely risky. A publically listed company is only beholden to the wishes of it's shareholders and the vagaries of the market; all these warm fuzzy things like bringing cricket back home will find no place.

It's particularly dangerous since we will have to often make financially unpopular but politically popular decisions to help bring cricket back to Pakistan. Don't see how the market will react positively to that tbh.

lol the nation will invest in PSL. 90% of the shares will be taken up by the major business syndicates who then effectively will control the league

This is a very bad idea because shareholders generally want money and profits from their investments.

Since intl. players do draw a lot of attention, it could mean the shareholders decide to increase the intl. cap to 5 or 6 players per XI or maybe even more and the pcb wouldn't have much power to stop it.

They could eventually even change the name to "super league" and cut out the Pakistan.

PCB can always hold on to a majority share

 

[Savak]

PCB can always hold on to a majority share

Thats what they intend to do

 

[Barragan]

PCB can always hold on to a majority share

The pcb is very unstable and you never know, the next chairman might be really greedy and may sell it all.

Right now, the chairmen are at least replaceable and will be scrutinised for making changes against the interest of Pak cricket.

There should be a clause, where the chairman or anyone in the pcb cannot have the power to sell the majority of the PSL to anyone or something along those lines, then and only then will I feel comfortable.

 

[amvbfm]

Yes, you argued against PCB taking the PSL on the stock exchange would be a bad move and the shareholders, directors will not keep the best interests of Pakistani Cricket and Cricketers at heart

The purpose of listing a company is to take capital from investors and invest it in the business that the company specializes in to generate returns for the investors. In this case it would mean that PSL will take money from investors and invest it in cricket(PSL) to generate returns for the investors. The PCB's primary mandate is to govern and promote the game in the country and revenue generation is only an incidental activity. If PSL becomes a company, the primary purpose of its existence will become revenue generation for its shareholders. No rational investor will want to invest in it otherwise and that will put the interests of the shareholders at odds with the aims of PCB. Moreover, the directors of the company will have a legal duty of protecting the interests of the shareholders, not of promoting the game in the country or being concerned about the well being of cricketers. Finally, I also don't understand how it will work with the franchise structure. The aims of a corporate PSL might also be at odds with those of the franchises.

 

[Savak]

I hope Ehsan Mani is seriously thinking about this approach and idea. In a recent interview he has said that he would like the PSL to be transferred to a seperate corporation with its own BOD and Independent Management from the PCB

 

[happydavy]

In a recent interview on tv, Sethi mentioned that he plans for PSL to be listed on the KSE100 Index enabling the nation to invest in its own asset, product i.e. the PSL in a large scale manner and giving the PCB a huge independent revenue stream enabling it to inject massive investments into Pakistani Cricket. This will also allow for accountability for the board, directors, officers, audited financials and even more tranparency.

But he said that this will require special permission from the govt and the parliament.

Do you guys believe this is a good idea?

Hate to be a stickler, but listing doesn't give a revenue stream but it's a one time partial sale of asset. Not going into good or bad of it, but clarifying that it's a one time gain and not an annual revenue stream.

 

[Savak]

Hate to be a stickler, but listing doesn't give a revenue stream but it's a one time partial sale of asset. Not going into good or bad of it, but clarifying that it's a one time gain and not an annual revenue stream.

But that one time sale of asset can potentially give the PCB $ millions or Rs billions and should the PSL continue to do well. The PCB can issue another IPO and the cycle will repeat.

The other benefits are that the PSL will become even more transparent given the filing and auditing requirements to be listed on the stock exchange. It will also be good for the management of the PCB.

The PCB will have the opportunity to use the funds for the uplift, expansion of the PSL, upgrading their academies, domestic cricket, stadiums, pitches.

Naturally the PCB will have to engage a top notch investment banker, issue a superb prospectus, annual report and engage in heavy duty marketing

 

[MMHS]

I am not sure if PSL can be listed as an entity in stock market. But I get the idea - listing PSL for say 25% IPO to bring money from investors, which I don't see possible. To do that, first PSL has to be broken into pieces for unit (stock) valuation, then comes the governance structure. Also, PSL is part of PCB, therefore the proceed of it (profit) should go to development of PAK cricket, rather than dividend. If money is to bring in PSL, it should be through sponsorship, viewership, gate money and goody items (trade merchandises). I am not aware of how many sports tournaments (like EPL NFL, NBA, MLB, NHL ...) are listed.

BUT, what can be done (which I am sure is possible), is to list PSL Franchise in Stock Exchange. This is very common in pro sports - like MU is listed and Glazers possess about 99% of MU stocks. Similarly, Kroenke now holds about 75% of Arsenal's share, FSG holds 100% of Liverpool's share (among which, principal owner J Henry holds over 50% alone). More or less every pro sports club/franchise are listed in stock market and a major share is kept by the people we recognize as owner. Shahid Khan also is major share holder of Jaguars & Fulham. Jerry Jones owns (means hold almost 99% shares) of the richest Sports Club in world - Dallas Cowboys (valuation ~$4.5bn).

In that regard, I don't think it's upon PCB to decide if Salman Iqbal wants to list his Company (Here Karachi Kings) to be listed or not. What S Iqbal can do is list do a proper valuation of K Kings, and offer IPO to bring investment - % of IPO depends how much control he wants share with investors. That money can be reinvested in franchise for hiring players, coaching staffs, developments facilities ..... in return, KK will increase it's equity through image rights, brand value, assets (players are assets) and increase revenue from various sources (like Liverpool is trying for a mega kits deal worth 75mn BP+/year), which after netting off annual costs can be shared to investors as dividends, bonus shares or simply can be retained as company assets for future. This is very common - after J Mou's sacking MU's share price increased at NYSE

Sports tournaments, leagues are a sort of platform where thousands of investors put their money via the participant clubs and earns from clubs profit - not aware if any such League is listed.

 

[Arham_PakFan]

Absolutely not.

 

[latecut]

Fans as well as PCB keep talking about legal matters and financial matters without having much clue about either of them.

 

[happydavy]

I am not sure if PSL can be listed as an entity in stock market. But I get the idea - listing PSL for say 25% IPO to bring money from investors, which I don't see possible. To do that, first PSL has to be broken into pieces for unit (stock) valuation, then comes the governance structure. Also, PSL is part of PCB, therefore the proceed of it (profit) should go to development of PAK cricket, rather than dividend. If money is to bring in PSL, it should be through sponsorship, viewership, gate money and goody items (trade merchandises). I am not aware of how many sports tournaments (like EPL NFL, NBA, MLB, NHL ...) are listed.

You have no clue of what you talking about. To an investment banker in me, it sounds funny when you say "PSL has to be broken into pieces for unit". All you need to do is, which i am sure is already in place, is to register PSL as a company, nothing more nothing less. Every company has shares, and the valuation at the time of IPO is managed by merchant bankers, its no rocket science. Obviously, PCB will list PSL only if the valuation is as per its liking. Then another random statement "PSL is part of PCB, therefore the proceed of it (profit) should go to development of PAK cricket, rather than dividend". If going by your hypothesis, PCB owns 75% of PSL post IPO, then nothing stops PCB to utilize it's share of annual dividend proceeds to invest in development of cricket. Dividend is a just a medium to distribute money to shareholders, it doesn't stop the recipient of dividend to spend it howsoever it wants to. All IPO helps a promoter (PCB) to do is to partially monetize your asset, there is nothing wrong or right with it. If markets gives PSL a decent valuation and PCB needs big money all at once, then by all means PCB should go for it.

 

[MMHS]

You have no clue of what you talking about. To an investment banker in me, it sounds funny when you say "PSL has to be broken into pieces for unit". All you need to do is, which i am sure is already in place, is to register PSL as a company, nothing more nothing less. Every company has shares, and the valuation at the time of IPO is managed by merchant bankers, its no rocket science. Obviously, PCB will list PSL only if the valuation is as per its liking. Then another random statement "PSL is part of PCB, therefore the proceed of it (profit) should go to development of PAK cricket, rather than dividend". If going by your hypothesis, PCB owns 75% of PSL post IPO, then nothing stops PCB to utilize it's share of annual dividend proceeds to invest in development of cricket. Dividend is a just a medium to distribute money to shareholders, it doesn't stop the recipient of dividend to spend it howsoever it wants to. All IPO helps a promoter (PCB) to do is to partially monetize your asset, there is nothing wrong or right with it. If markets gives PSL a decent valuation and PCB needs big money all at once, then by all means PCB should go for it.

May be, I am not an investment banker, but I haven't seen tournaments being listed, rather have seen Clubs/Franchise been operating in that model.

 

[AMSS]

May be, I am not an investment banker, but I haven't seen tournaments being listed, rather have seen Clubs/Franchise been operating in that model.

You are correct. PSL isn't a legal entity. PCB is a legal entity, as are the six franchise. PCB can list itself, but not PSL because it has NO legal character/personality. PCB can create a business unit separate from itself to handle PSL, and incorporate it, and then list it on stock exchange. [MENTION=147130]happydavy[/MENTION] is a little confused or just incompetent in his day job.

 

[AMSS]

Also, don't you have to be of a certain size e.g $500 Million and over to qualify to be listed? That's how it is everywhere else.

LMAO!

Please go through the list of companies listed on KSE and find out how many meet that criteria.

Just for a reference, Bombay Stock Exchange is about 40 times bigger but a company only needs to have a net worth of approx. USD 150k in the preceding three years to become eligible. Of course, there are other eligibility norms re profitability etc.

 

[MMHS]

You are correct. PSL isn't a legal entity. PCB is a legal entity, as are the six franchise. PCB can list itself, but not PSL because it has NO legal character/personality. PCB can create a business unit separate from itself to handle PSL, and incorporate it, and then list it on stock exchange. [MENTION=147130]happydavy[/MENTION] is a little confused or just incompetent in his day job.

It' true that I am not an investment banker, rather just a sports fanatic who has little idea of event management & brand promotion. I haven't seen any tournaments being listed, and some of these tournaments can match global top dogs in terms of revenue - say NFL, it's annual revenue is over $10bn. These tournaments are self revenue generating platform - who is the fool to share some ownership & authority when sponsors are queuing up to pay and the organizers can always make money by selling media rights or incorporating new franchise?

 

[Savak]

Listing the PSL will create a patriotic drive, the nation of Pakistan will invest out of patriotism and the whole idea has potential to deliver returns.

It will also make the PCB less dependent on broadcasters for TV rights and they will have more confidence, leverage when negotiating deals with broadcasters, advertisers and other sponsors and will not let anyone low ball them.

It will also give the pcb to afford higher salaries to hire some elite international players.

Bottom line it is an interesting, out of the box, risky idea but luck favors the brave

 

[happydavy]

You are correct. PSL isn't a legal entity. PCB is a legal entity, as are the six franchise. PCB can list itself, but not PSL because it has NO legal character/personality. PCB can create a business unit separate from itself to handle PSL, and incorporate it, and then list it on stock exchange. [MENTION=147130]happydavy[/MENTION] is a little confused or just incompetent in his day job.

Haha, how about reading what I wrote. I wrote "All you need to do is, which i am sure is already in place, is to register PSL as a company, nothing more nothing less.". Unless you are in the business of nit picking, it's fairly clear that I assumed it's a legal entity and if it's not, it's no big deal to make one.

 

[Varun]

Listing the PSL will create a patriotic drive, the nation of Pakistan will invest out of patriotism and the whole idea has potential to deliver returns.

Makes you wonder why there are loss making companies on any country's stock exchange, then.

What's the point listing an event (an event, mind you not a company) that only runs 23 days out of 365?

 

[latecut]

Only professionally managed profit making entities who need to raise capital for growth normally list in a stock exchange. I do not think PCB qualifies on most counts.

 

[jagatk]

Listing the PSL will create a patriotic drive, the nation of Pakistan will invest out of patriotism and the whole idea has potential to deliver returns.

It will also make the PCB less dependent on broadcasters for TV rights and they will have more confidence, leverage when negotiating deals with broadcasters, advertisers and other sponsors and will not let anyone low ball them.

It will also give the pcb to afford higher salaries to hire some elite international players.

Bottom line it is an interesting, out of the box, risky idea but luck favors the brave

You do know that IPO is only a temporary capital injection. It isn't a substitute for actual revenue and you also have to pay a dividend on it and if pcb use the capital to make the revenue expenditure you are suggesting they will bankrupt themselves very quickly.

 

[latecut]

Capital is used to create infrastructure that adds additional capacity leading to growth, and then you have to market and sell your product. I do not think anyone in PCB possesses the qualifications to do any of the above.

 

[JattMaula]

You do know that IPO is only a temporary capital injection. It isn't a substitute for actual revenue and you also have to pay a dividend on it and if pcb use the capital to make the revenue expenditure you are suggesting they will bankrupt themselves very quickly.

Well PCB can try list PCB itself next if capital injection from psl public offering runs out.

 

[Savak]

You do know that IPO is only a temporary capital injection. It isn't a substitute for actual revenue and you also have to pay a dividend on it and if pcb use the capital to make the revenue expenditure you are suggesting they will bankrupt themselves very quickly.

The Capital can be used to make investments in the PSL and Pakistan Cricket which will result in 20-30 times higher return for Pakistan Cricket and the PCB will be able to pay a dividend to the shareholders