MSG Rises as Clippers Fetch $2 Billion, Rangers AdvanceSarah Rabil
Madison Square Garden Co. shares are on an all-time winning streak as its New York Rangers advance to the Stanley Cup Finals and the Los Angeles Clippers sell for a record $2 billion.
MSG owns the Rangers hockey team, the National Basketball Association’s New York Knicks and entertainment venues such as Madison Square Garden and Radio City Music Hall. Thanks to the rival NBA team’s sticker price and the Rangers’ shot at the National Hockey League title for the first time in 20 years, MSG shares rose for the 11th day in a row. That’s the longest streak since the Dolan family spun MSG off from Cablevision Systems Corp. four years ago.
Former Microsoft Corp. Chief Executive Officer Steve Ballmer outbid at least four other suitors for the Clippers, with each of the bids shattering the previous record sale price for an NBA team of $550 million paid in April for the Milwaukee Bucks. The transaction was done five days before a vote by NBA team owners on whether to force a franchise sale because of racist comments made by former owner Donald Sterling.
The Knicks may be “intrinsically worth” as much as 50 percent more than the Clippers, bringing the value of MSG’s assets to about $6 billion, Albert Fried & Co. estimated in a note today. MSG has a market value of about $4.2 billion.
While the premium for the Clippers reflects a bidding war among billionaires, it “also says the market for premier sports assets in large sports markets is robust,” Rich Tullo, an analyst with Albert Fried, wrote in the note.
After the 1-0 home win against the Montreal Canadiens last night, the Rangers are heading to the Stanley Cup Finals for the first time since they won the title in 1994. New York will face the Los Angeles Kings or the defending-champion Chicago Blackhawks for the NHL title.
“As an ‘owner/shareholder’ Jim Dolan has provided the Knicks and the Rangers the resources needed to win,” Tullo said of MSG’s chairman. “The Rangers validate the idea that a Jim Dolan controlled team can win at the very highest level in sports.”
MSG rose 3.3 percent to $54.85 at the close in New York, the biggest gain in 13 months.