MSG (MSG) Shares Under Pressure on Possible Departure of 'Lin'-spiring Superstar

July 16, 2012 8:18 AM EDT
Is the Lin-credible rise in Madison Square Garden (Nasdaq: MSG) stock over the last year about to be put in jeopardy?

Surprise NBA star Jeremy Lin may not be returning to the New York Knicks franchise next year, if contract negotiations don't pan out as expected. Though Lin was the face-and-name of the Knicks in February, when he stepped up and grabbed the attention of a nation, the Knicks are making little in the way of effort to retain him.

"Courting" Lin hard is the Houston Rockets organization, which said it would pay up to "$1 billion" for Lin, though market cap regulations will probably not allow that to happen. The deal also includes a $15 million balloon option for the third year. It only underscores continued demand for Lin, which had folks who normally wouldn't turn to basketball for entertainment, now buying jerseys for the team and trying to formulate their own Lin-sane catch phrases.


Starting just 25 games last year, many reiterate that contracts up to $60 million are still rare in the NBA, which appears to spew money at players on the regular basis. Like most other sports, however, the bulk of an NBA player's income derives from product sponsorships.

So, whether MSG stock will revert back to the $25 to $30 level it was at pre-February if Lin leaves is a great question. For the Knicks' and investors sake, the chatter is getting more and more Lin-teresting.

Our only question is this: would Lin have the same star power (or, possibly, more) if his last name was Wang?

Shares are indicated lower Monday morning. The stock broke a six-session slide last Friday, closing 0.5 percent better.

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