A Financial Analyst Thinks It’s Possible James Dolan Could Sell The Knicks Soon
Marketwatch- There’s not much in the sports world that could happen outside the boundaries of play that could excite fans like a sale of the New York Knicks. Whether deserved or not, Knicks fans blame the plight of New York’s team on James Dolan, who as executive chairman of Madison Square Garden Co., and its majority owner, has final say on the team’s direction. But what if Dolan sold the Knicks? BTIG analyst Brandon Ross thinks it’s possible.
“Following the sale of the Houston Rockets for $2.2 billion, we would not be surprised to see the Dolan family consider a sale of the Knicks and/or the Rangers,” Ross wrote in a blog post to investors on Monday. Madison Square Garden shares rose 1.8% on Monday. The speculation isn’t entirely new — this year, shares of Madison Square Garden are up 30%, while the S&P 500 index SPX is up close to 11%. The Dolan family has long capitalized on the significantly profitable cable bundle. They control both the Knicks and the television station which shows most of their games, MSG Networks. As the bundle disappears or otherwise morphs into something else, however, they have been unwinding ties to the legacy TV bundle. In 2015 MSG Networks Inc. was split off from Madison Square Garden Co., a move Ross believes was made to monetize the networks and shift focus onto MSG’s live entertainment business. That year Dolan also sold Cablevision to French broadcaster Altice. Now there’s a belief the Dolan family is looking to sell MSG Networks. All of this to note, the Dolans have recognized the decline of the traditional TV bundle, and thus the potential decline in the valuation of sports content.
“Today’s monetization system, the one we’ve had over the last 20 years… Where 90 something percent of the American public who has television pays for ESPN whether they watch ESPN or not, right?” Dolan said during a future of sports content panel at the Consumer Electronics Show in January. “All of that advertising, if that system falls apart, which it looks like it is starting to erode now, it will not even come close to that kind of production of rights value and that’s really the thing we will all have to grapple with.”
There is a clear disconnect between the direction of valuations of sports teams and the valuations of their current distribution partners, according to Ross. But maybe most importantly, there is also a scarcity value attached to sports teams — especially ones in New York. “Given Dolan’s views, we would think he would have to consider at least partially monetizing MSG’s sports interests (even with the Knicks at a competitive lull), if not now than in the near- to medium-term,” Ross wrote. “The largest dollar upside would clearly come from selling all or part of the Knicks. “Is it conceivable that the Knicks alone could fetch over $4 billion? The current value of all of MSG is about $4 billion.” Earlier this year, Forbes tagged the Knicks’ worth at $3.3 billion.
I don’t know if getting excited about rumors of James Dolan potentially selling the Knicks is the new getting excited about rumors of a superduperstar wanting to sign with the Knicks. But I also don’t give a shit either. I am over the moon right now and already dreaming of a world where we are free James Dolan’s evil, tyrannical rule. Dolan leaving town would be equal to Scar getting bounced out of Pride Rock. Nothing but rainbows, sunshine, and competitive basketball in New York City. I may go from looking up Photoshops of NBA stars wearing Knicks jerseys to looking up Photoshops of other billionaires sitting in the owner’s suite at a Knicks game. I mean I wrote an entire blog on if I would trade my favorite Knick to the Clippers just so we could get their owner back. You would figure Dolan would rather cash out and enjoy his life than literally be the most hated motherfucker in all of New York. But still, here we are.
Now I will admit that I don’t know the analyst that made these statements (Brandon Ross) from a clickhole in the wall. Brandon Ross could just be throwing darts at a dartboard and call it analysis since that’s how I figure all analysts do their jobs. I guess this guy has the vibe of an analyst on Twitter, since he’s wearing a blazer and a half of smirk in his avi and his bio link leads me to a site with a paywall.
I will also admit that a guy with 700 Twitter followers shouldn’t give me butterflies in my stomach for any of his projections. But 3 of those 700 people just happen to be people that I know that are smarter than me. Namely Kerns, Sales Guy Jay, and Riggsy. For those that don’t know, Kerns is one of Big Swinging Dick Chernin’s guys and helped load Barstool onto the rocket aimed for the moon. If Kerns was able to see what Barstool was a few years ago and where it could be based on some money and the slightest bit of structure, he clearly knows what he is doing. Jay is Barstool’s Chief Revenue Officer. Did he lock himself in the bathroom at HQ last year? Yeah. But he also is leading the team that is loading Barstool up with enough fuel (read: money) to get us to the moon. And Riggs went to Harvard. Ever heard of it?
Which is why I am all in on you, Brandon. If those three vouch for you enough to the point they will hit the follow button on Twitter, then so do I. Sharing a name with the smartest character on Game of Thrones doesn’t hurt either. And most importantly, I am desperate for these whispers to be true after last night. I just endured an INCREDIBLY disappointing and depressing Mets season that saw almost every important member of the team die or get traded. Eli Maning and the Giants offensive line somehow looked worse last night than they did all of last season. And I can’t even fake optimism for this season’s Knicks unless Derrick Rose labels us as a superteam from the Cavs locker room. And when you lose all hope, then you are in the doldrums of being a sports fan. Every day is actually night and sleep is the only escape. If I have to believe the forecasts of some dude I never heard of, I will. If I have to cut the cord so Cablevision and the rest of Big Cable continues to bleed out, I’ll get my scissors now and tell the cable operator to suck my dick when they try to keep my business like it’s a throwback episode of Pardon My Take. Because if the Giants end up sucking this season, I am going to become one of those sports fans without any bright points in their lives. And I’ve seen what happens to those people and it isn’t pretty.
In Shawshank, Red says that hope is a dangerous thing. But when you are a Knicks fan, it is the only thing. Please be right, Brandon. Or at least don’t be dead wrong.