Wallin Street
thanks for starting this thread LINvincible dude! i'd like to point out the following articles from Feb 2012, during the height of Linsanity, and June 2012, at the tail end of the season. Jeremy Lin, for the Knicks, indeed means a billion dollars to the Knicks organization, which is why insiders originally said the Knicks would match up to 1 billion, in their tongue-in-a$$-cheek way. the proof is in the wall street pudding:
-------------------------------------------
What Jeremy Lin means for MSG stock
SportsWatch
Rising popularity and victory totals should bring increased revenue
February 16, 2012|Sam Mamudi, MarketWatch
ShareEmailPrint
NEW YORK (MarketWatch) ? ?Linsanity? isn?t solely on the basketball court, where Jeremy Lin has orchestrated a seven-game New York Knicks win streak ? it?s on Wall Street, too.
Buoyed by Lin?s heroics, investors have been snapping up shares of Madison Square Garden Co. (US:MSG), which owns the Knicks. The company?s stock is near its all-time high, having peaked Monday at $33.18 each. Shares are up about 10% since Lin began playing heavy minutes for the Knicks on Feb. 4.
It?s not as if MSG was struggling before Lin came along ? from the beginning of the year till Feb. 3, it had risen 13% while the S&P 500 Index was up 2.6% in the same period. MSG shares have three analyst buy ratings and three hold ratings, according to FactSet Research, and the company topped consensus estimates with its latest quarterly earnings, announced last week.
And even before Lin, the Knicks were an incredibly successful franchise commercially and one of the richest in the National Basketball Association. The club?s average attendance this season is right at Madison Square Garden?s 19,763 capacity.
But that doesn?t mean Lin ? and a winning Knicks team ? can?t boost the fortunes of a company with more than $1 billion in annual revenue.
?There are real gains to having the Knicks actually win,? said Brett Harriss, an analyst at Gabelli & Co. who covers MSG.
Two big areas where success will mean noticeably more dollars: postseason games and increased audiences for the MSG Network.
The Knicks, with one of the worst backcourts in the league, were struggling early in the lockout-delayed season with an 8-15 record and apparently out of the playoff picture before Lin took over at the point. The team is now 15-15, eighth best in the Eastern Conference, just one game behind the seventh-place Boston Celtics and 2 ? games ahead of the chasing Milwaukee Bucks.
Harriss estimated that ticket sales alone for home playoff games could bring in $3.5 million apieace for the Knicks. On top of that, of course, would be merchandise and concession sales.
In the meantime, regular-season success means more television viewers ? MSG says ratings for Knicks games on its MSG Network are up about 70% this year. That will help drive up the channel?s advertising revenue, said Harriss.
It should also help ramp up affiliate fees. MSG Network has the second broadest in-market reach ? 4.1 million homes ? of any regional sports network, according to SNL Kagan, which estimates MSG is paid an average of $2.63 for each of its 7.7 million total subscribers."
--------------------------------------------------------
Jeremy Lin, China, And The Nike Stock
June 1, 2012 | 2 comments | about: NKE, includes: MSG
On, February 4, 2012, Jeremy Lin, unknown, debuted as a starter for the New York Knicks. At the end of regulation, Lin came through with 25 points, 5 rebounds, and 7 assists in leading his team to victory against the New Jersey Nets. After one week, as the Knicks starting point guard, Lin had slapped together 27 / 5 / 8 in points, rebounds, and assists per game averages. Linsanity ensued amid a seven-game win streak in then basketball-starved New York City. Amid the Renaissance, details of Lin's vagabond life story emerged to capture the mystique of the Horatio Alger American Dream.
Today's American Dream, of course, is heavily weighted towards crossover marketability, international profits, and the China growth story. In the name of capitalism, Jeremy Lin, and Nike (NKE) were made for each other. Jeremy Lin will unite his stellar play and 'aw-shucks' charisma alongside Nike's otherworldly design team and marketing machine in Holy Matrimony. To fully appreciate the Jeremy Lin effect, we must first break down his no-look assists to Madison Square Garden (MSG) stock, before next comparing him to Yao Ming and Kobe Bryant, two other Nike pitchmen who have made lucrative inroads into China.
Jeremy Lin and Madison Square Garden Stock
In February 2012, amid the height of Linsanity, Madison Square Garden shares quickly gapped up from $29 to $33. This run continued until the month of May, when an injured Lin watched his Knicks get dominated and ousted in the NBA Playoffs by Miami Heat. At that point, the MSG advance stalled out at $38 per share. Because of Jeremy Lin's play on the court, Knicks Basketball was the hottest ticket in town. The hysteria translated into increased ticket and merchandise sales, which eventually trickled down into Madison Square Garden's bottom line and improved shareholder returns.
In its latest quarterly report, Madison Square Garden reported $31 million in Q1 2012 net income, which is a 63-percent increase over the 2011 year-over-year quarter. For MSG, Q1 ends on March 31, which would include the beginnings of Lin's meteoric rise. Broken down further, MSG reported $25 million worth of Q1 2012 operating income from its Sports Division, compared to $129,000 in the year-over-year period.
Jeremy Lin made $762,195 in 2011 base salary from the Knicks. For MSG shareholders, it was money well spent. At the moment, Lin now stands on the cusp of NBA contract negotiations, as a restricted free agent. I am certain that Knicks brass will pay top-dollar to retain this star for the New York market. Nike executives, of course, watched Lin's ascendancy with baited breath, as multiple sources report that the burgeoning star has already been signed to a multimillion-dollar shoe and endorsement deal.
China and NBA Basketball
With a population of more than 1.3 billion people, alongside its rapid industrialization, China is the world's most viable frontier for finished, consumer goods and services. Alternatively, China is increasingly receptive to Western capital, as means to legitimizing both its market reforms and authoritarian regime. Both the NBA and Nike eye the Chinese market lustily, as a long-term driver for net income growth. For all parties to meet their respective ends, it is critical that a transcendental superstar emerges to facilitate the role of Ambassador. With a Nike contract and starting role in tow, it is likely that Lin, Chinese-American, will assume the International Ambassador baton from Yao Ming, Kobe Bryant, and LeBron James.
Yao Ming and Kobe Bryant, especially, are wildly popular in China. Ming, from Shanghai, starred as the number one overall 2002 pick of the Houston Rockets, before his 2011 retirement. According to the Wall Street Journal, Kobe Bryant is a leading man in China, due to his five championship rings and multiple tours of the country. Kobe Bryant, in fact, has overtaken Yao Ming as Nike's top merchandiser, in terms of jersey and shoe sales in China.
Bryant, 33, cannot carry out his rejuvenation act against Father Time forever. At 23, serendipity would have it that yet again, Jeremy Lin is perfectly positioned to take advantage of another window of opportunity.
The Bottom Line
According to Sports One Source, Nike controls roughly 90 percent of the basketball shoe market, as it is the corporation most associated with Michael Jordan and all-around cool. Behind such dominance, Nike has performed as a story stock since the early 80s. In 2009, shares bottomed out at $40, before advancing towards $110 as of May 2012. With such impressive brand recognition, Nike's lease on Jeremy Lin's star appeal and liaison into China is effectively a cheap call option baked into the stock.
For fiscal 2011 ending May 31 last year, Nike posted $2.1 billion in net income, on 20-percent average annual growth over the past two years. In its latest quarterly report for period ending February 29, 2012, Nike is still operating at 10-15 percent year-over-year earnings per share growth. Broken down geographically, China represents Nike's largest growth engine. By all measures, Nike's profits attributable to China are improving by at least 25 percent each year.
In 2011, Nike earned $777 million in earnings before interest and taxes (EBIT) from China, out of a total $2,848 in EBIT. With Jeremy Lin and his shoes leading the way, I expect China to generate at least $1 billion in EBIT for fiscal 2013 and surpass North America as Nike's largest regional division by 2020. With a 25-percent foreign tax rate, Chinese sales would add at least $750 million to Nike's bottom line. By these estimates, Nike may post $2.5 billion in 2013 net income, or $5.25 in basic earnings per share. At 20 times forward earnings, Nike would have fair value at $110 per share.
Nike is a solid, long-term holding.
Disclosure: I am long NKE.
-------------------------------
bottom line: Knicks MUST match, or lose a lot more than the price of luxury tax for 1 f*cking season. James Colon would lose his shirt, or at least a billion of them. do you really think his ego will get in the way of giving up his golden egg? i don't.
:2cents: x 100 billion