Knicks’ terrible start to cost Madison Square Garden shareholders $6 million
In a development that only seems to pile on to the dreadful start the New York Knicks have had this season, ESPN’s Darren Rovell reports that Madison Square Garden shareholders are set to lose $6 million in profits as a result.
The Knicks stumbled out of the gate this year and proceeded to face-plant repeatedly at each successive seasonal hurdle and now sit with a woeful 5-23 record.
The realization that the Knicks downward-spiraling season will cost shareholders big was spelled out by Rich Tullo, director of research for Albert Fried & Company, which covers the MSG stock.
Tullo, citing terrible television ratings for Knicks broadcasts as the primary cause of the profit shortfall, must have something of a sense of humor, as he managed to take a fairly witty potshot at the Knicks’ expense in his assessment.
“As the Harlem Globetrotters are the only New York professional [basketball] team winning in Madison Square Garden this season,” Tullo writes, “we cut our estimates to reflect light TV ratings.”
Zing. Maybe the Knicks should start calling themselves the Washington Generals and play “Sweet Georgia Brown” during home games.
Rovell reports that Madison Square Garden stock actually is up 14 percent in the past several months. But that hasn’t prevented shareholders the expected financial hit.
“Following more than 20 games highlighted by creative destruction, we think the sample set is large enough to determine lower estimates,” Tullo writes.
Before anyone weeps for MSG shareholders, only 30 percent of revenues come from advertising revenues mostly generated from televise games. Ticket sales, affiliate fees and other revenue streams reportedly remain consistent, providing some semblance of insulation from the precipitous drop in television ratings.
(photo credit: WNYC.org)