MSG Shares Reach All Time High as Lin’s Popularity Rises

February 14, 2012

Jeremy Lin, impotent which has swept up Knicks fans and raced through sporting goods stores, is gripping Wall Street as well as shares soaring to record status.

On Monday, shares of Madison Square Garden Company, which owns the Knicks, the arena where they play and the cable network that broadcasts their games, hit a record high because of the sudden emergence of Jeremy Lin, the team’s previously unknown point guard.

Shares of MSG rose 3.8 percent Monday to a record-high $32.32, with three times the average number of shares being traded.

Analysts who follow the stock say that Lin could not only continue to benefit ticket prices, merchandise sales and television ratings, but also provide the impetus to end the dispute between MSG and Time Warner Cable, which has been unable to broadcast Knicks games this year.

“No doubt on the court Mr. Lin’s accomplishments rank with the career starts of LeBron James, Isiah Thomas and Shaq,” Rich Tullo, the director of research at Albert Fried & Company, wrote to investors. So, Tullo asked, will Lin help the Knicks and MSG off the court, too? “In our view, the answer is yes.”

Sales of all merchandise at the Knicks’ official online store and Facebook page have risen more than 3,000 percent in the past week, said Delivery Agent, which runs the online store. Some items, like the Jeremy Lin replica home jersey, are sold out.

There is nothing new about teams, networks or merchandise makers cashing in on a player’s success. Detroit went crazy over the Tigers’ Mark Fidrych in 1976, and the Los Angeles Dodgers experienced Fernando-mania over Fernando Valenzuela in 1981. Ditto when Ichiro Suzuki made his debut in Seattle with the Mariners in 2001. Ricky Rubio is making a splash with the Minnesota Timberwolves this season.

But Lin is unique because of how quickly he has turned into a star on the court and a moneymaking machine off it.

Lin’s emergence has created a frenzy for Knicks tickets, even in other cities. The average price for tickets to games in New York has risen to more than $100 a ticket, from $85, according to Jason Berger, who runs the ticket broker

“We had sold more front-row seats in the last month than we had for the entire season last year,” Berger said. “There are still some good deals out there for future games, but we expect those deals to be harder to find as the excitement grows.”

Plenty of fans are tuning in. MSG Network had its highest-rated Knicks broadcast Saturday, when the team played in Minneapolis. In the four games Lin has started, the average household rating on MSG Network has increased 70 percent compared with the previous 20 games.

Despite the hype, Richard Greenfield, an analyst at BTIG, said the Knicks would have to have a lot more success before he is convinced Madison Square Garden will benefit over all.

“Lin has helped the stock price, but the underlying business has not changed,” he said. “No one knew him a week ago, so let’s not get ahead of ourselves.”

by Ismail Uddin