Madison Square Garden Shares Soar In Anticipation Of The NBA Season
CNBC Sports Business Reporter
The thoughts of a year-long NBA work stoppage greatly affected the stock of The Madison Square Garden Company. Without the Knicks playing, MSG wouldn't be able to fully cash in on the completion of the first stage of its three-year renovation, which will cost more than $850 million.
But now that the owners and players have reached a tentative agreement, with the intention of playing 66 games this year, investors are seeing dollar signs again. The stock is up 12.2 percent over the last two days, after a big day Monday and closing up 1.9 percent on Tuesday. The closing price of $28.91 is an all-time high for the company, which spunoff from Cablevision in February 2010.
Although the company wasn't providing any guidance, the entire NBA season was worth at least $70 million to the company, according to Rich Tullo, an analyst at Albert Fried & Co. Losing the first two weeks of the season, cost the team as much as $7 million in lost ticket sales and in-arena revenue and as much as $3 million in lost advertising revenue for the MSG Network, Tullo speculated. When the schedule comes out, the Knicks will likely lose an equivalent amount of home games.
Madison Square Garden's fiscal first quarter profit rose 11 percent, as margins were better than expected amidst the most expensive renovation of an arena in sports history.
Although the NBA schedule has not been released, it is known that the Knicks are hosting Boston Celtics for the first game of the regular season at noon on Christmas Day.
Questions? Comments? SportsBiz@cnbc.com
