MSG stock dives following Jeremy Lin’s departure, after an initial upshot in the wake of ‘Linsanity’
MSG is the company that owns the New York Knicks. It also owns the Madison Square Garden, the historic Beacon Theatre in New York and the gorgeous Chicago Theatre in that city's downtown loop, along with the New York Rangers and several television stations. It's a publicly traded company that would seem, considering its considerable holdings, to be impervious to the play of a pretty good point guard. Apparently that's not the case, as we look at the effect that former Knick guard Jeremy Lin has had on MSG stock.
When Lin busted out of relative obscurity last February to lead New York on a 10-3 midseason run, MSG's stock shot way up, as documented by the New York Observer's Foster Kamer. That boon continued even throughout Lin's trip to the bench in late March, following an MCL tear, and New York's first-round ouster from the playoffs. The stock didn't dip until the Houston Rockets made Lin an offer as a restricted free agent that made even the spend-heavy Knicks uneasy, but because the assumption at the time was that New York would match any offer no matter how ridiculous, MSG's shares stayed somewhat steady.
Then word leaked out that New York might not match, and Knicks guard (and hopeful Lin mentor) Jason Kidd was arrested on a DWI charge. And the stock fell, by 8.5 percent. All this after a 31 percent upshot in the wake of what we'll all fondly recall as "Linsanity."
However, on that day, reports came out that the Houston Rockets had made an offer to Lin that might make it difficult for the Knicks to keep their guard. Since then, Lin has accepted the offer, and the Knicks have let him go and MSG is now trading at approximately $35.50, a drop of 8.5% in two weeks.
Seriously? A point guard can do this? An unproven one that, despite his brilliant February turn, still has quite a few of us wondering if he can even man the handle as a NBA starter?
Kamer, from the Observer, explains Lin's significant reach:
What's perceived by many to be the legendary mismanagement of the New York Knicks by ownership (and is generally reflected in their winning percentage from the last few seasons) proved a decent map to see where this was headed: Regardless of Lin's ability as a player, he is a global fan phenomenon—for nerds, for Christians, for Asian-Americans—especially in New York City. Lin piqued the interest of those who had no interest in basketball prior to his rise. Lin was essentially responsible for ending one of the most bitter cable carrier disputes in recent history.
Apparently these things count. They count more than, say, the Rangers making the Stanley Cup Finals or eight nights worth of tasty licks from the Allman Brothers at the Beacon, man.
And now that we've realized that the NBA's "stretch provision" could have mitigated New York's risk with Lin, should he fail to pan out before his 2014-15 balloon payment hits, and that personal and typically petty politics played a role in Lin's jump to Houston, it's becoming clearer and clearer that MSG head honcho James Dolan truly is a dunderhead for the ages. With stock falling, Lin's contract was one that the Knicks could not afford to pass on, and yet they let him slip away in spite of several strong and significant reasons to keep the third-year guard.
Try not to work your neck into soreness as you shake your head repeated for the next 20 minutes.
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