March 17 (Bloomberg) -- The New York Knicks’ hiring of Hall-of-Fame coach Phil Jackson is seen as another move to fortify the Madison Square Garden Co. unit after a $1 billion overhaul of the Midtown Manhattan arena.
Jackson’s addition comes about two weeks after MSG made Tad Smith its new president and chief executive officer. It bolsters the organization with someone whose persona is strong enough to coexist with MSG Executive Chairman James Dolan, said Maxim Group analyst John Tinker.
“The message is they’re taking this seriously, and that Jimmy Dolan does want to have the best person there,” Tinker said in a telephone interview last week. “That’s a huge message.”
Coming off elimination last season in the Eastern Conference semifinals, Dolan said before this year that the Knicks had the talent to win the NBA title. Instead, the team is 27-40 and 3 1/2 games out of the final Eastern Conference playoff spot.
New York made the playoffs each of the last three seasons following a stretch in which it missed the postseason six straight years and eight of nine. In 2013, MSG completed a three-year privately financed $1 billion renovation of the company’s namesake Manhattan arena.
“What happened a couple of years ago was the Knicks became part of the conversation again,” said Tinker, who rates MSG shares as a “buy” and doesn’t own the stock. “Now they’re suddenly falling back into irrelevancy again. If you make them relevant, then everything else takes care of itself. The whole Garden is worth more -- you’ve got advertising, the whole sponsorship side and ticket prices will follow inexorably.”
Single-game Knicks tickets, with fees, range from $74.55 to $3,812.85. The average price is $129.38, the most among the NBA’s 30 franchises, according to Chicago-based Team Marketing Report.
MSG shares, which in July reached $62.66 -- the highest since the stock began trading in 2010 -- rose 51 cents to $57.99 in New York on March 14. The company also owns the National Hockey League’s Rangers and Radio City Music Hall.
It’s the first full-time front-office position for the 68-year-old Jackson, who served as an adviser to the Detroit Pistons last year when they were seeking a new coach. The team ended up hiring Maurice Cheeks, who was fired after going 21-29.
“I think it’s easy to be a GM because you don’t have to deal with 12 to 15 personalities as a coach,” said Hall-of-Famer Walt Frazier, who was a Knicks teammate of Jackson when the team won its only two championships, in the 1970s. “Obviously he knows talent, he put guys together on the court before.”
The executive-level move will allow Jackson to mold the Knicks without suffering through the day-to-day grind of NBA life. Having had both hips and a knee replaced, he said in a March 3 interview with USA Today that he might need the other knee replaced and that he had traveled “very rarely” since stepping down as the Los Angeles Lakers’ coach in 2011.
“I don’t want to be on the sidelines,” Jackson said, according to USA Today. “That’s for damned sure.”
The Knicks have scheduled a news conference for tomorrow. Jackson’s hiring was confirmed by a person with knowledge of the situation.
Jackson won six NBA titles with the Michael Jordan-led Bulls, whom he coached from 1989-98. He joined the Lakers in 1999, winning five more championships before resigning in 2011. He has two more coaching championships than former Boston Celtics coach Red Auerbach, who is second on the NBA career list.
The Knicks selected Jackson, a power forward, with the 17th pick of the 1967 NBA draft out of the University of North Dakota. He played in New York from 1967-78 before finishing his career with the New Jersey Nets, retiring with averages of 6.7 points and 4.3 rebounds a game.
Spinal fusion surgery kept Jackson from playing for the 1969-70 Knicks team that won the NBA title. He was active when New York won its most recent championship in 1973, playing on a roster that included Frazier, Willis Reed, Dave DeBusschere, Bill Bradley and Earl Monroe.
The current team has been run by Steve Mills, who in September returned to the Knicks’ front office as president and general manager, replacing Glen Grunwald.
Grunwald’s predecessor, Donnie Walsh, was the Knicks’ most recent high-profile executive, brought in to rebuild the club and help lure LeBron James to New York. While James spurned the team, opting to join the Miami Heat as a free agent, Walsh landed All-Stars Carmelo Anthony and Amar’e Stoudemire.
The Knicks floundered before Walsh’s arrival while led by Hall of Fame player Isiah Thomas as the team’s president and coach. Thomas’s tenure included a sexual-harassment lawsuit by a female former team executive against Dolan and the team’s then-parent Cablevision Systems Inc.
A jury in that case in 2007 awarded $11.6 million to Anucha Browne Sanders, once the Knicks’ senior vice president for marketing and business operations. MSG said it settled two months later at the request of then-NBA Commissioner David Stern. Terms of the settlement weren’t disclosed.
Browne Sanders said in her lawsuit that she was subjected to obscenity-laced tirades and sexual advances by Thomas. She said she was fired by Dolan in January 2006 for complaining.
Walsh resigned as president of basketball operations in June 2011, saying he didn’t want to sign a new long-term deal at the age of 70.
Anthony, whose 28 points per game rank second in the NBA this season, can opt out of his contract and become a free agent this summer. The team gave up its first-round pick in the 2014 draft to the Denver Nuggets as part of the deal that brought Anthony to New York.
As the Knicks try to keep Anthony and at some point sign other top players, Jackson’s addition probably would be helpful, Tinker said.
“I have to believe someone like Carmelo -- does he stay, does he go -- with Jackson there it’s a different discussion,” Tinker said. “Even if he’s not coaching, he brings a history of winning at everything he’s done.”
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