There was a lot of Linsanity this past weekend. Monday we saw what the market thought of Jeremy Lin's 38 point game against the Lakers on Friday night, followed up by a 20 point performance on Saturday. Lin has led the Knicks to five straight wins, made even more amazing because the team's two best players, or what was perceived to be its two best players, have been out during this streak. Lin hasn't just revitalized the team, which was struggling through a poor season, and his coach Mike D'Antoni, who just a week ago was faced with rumors he would be fired, but he has fired up the fan base.
For those of you living under a rock, Jeremy Lin is a second year pro who was cut twice and played for the Knicks developmental league team this season. He was fourth on the team's depth chart just a few weeks ago and was about to be released again. Instead, because of injuries, D'Antoni inserted him in the starting line-up five games ago and he led the team to a win while scoring 25 points and dishing out six assists. He's only gotten better, averaging nearly 27 points in this stretch and outgunning Kobe Bryant on Friday night.
Madison Square Garden (NASDAQ:MSG) owns the Knicks, as well as the New York Rangers, a minor league hockey team and a WNBA team. The company also owns the eponymous Madison Square Garden arena, some other venues, and other media holdings including television stations.
Today, because of Jeremy Lin, shares hit a new 52-week high of $32.30. With 62.08 shares outstanding, today's move up of $1.15 means the market thinks Jeremy Lin's weekend success is worth $71.4 million.
Whether Lin is actually worth that much or not is a debate that won't be able to be settled. Certainly he has revitalized the team, sold a lot of jerseys, and perhaps made the Knicks much more popular in Asia. There's another piece of the puzzle that adds value to Madison Square Garden. As Mike Ozanian from Forbes points out, Lin's success may finally cause Time Warner (NYSE:TWC) and Madison Square Gardens to settle a more than month-long dispute that has caused the Knicks and other MSG Network teams off of Time Warner Cable since January 1 because of a rate dispute. The Jeremy Lin-mania may cause Time Warner subscribers to jump ship in order to see the Knicks. Up until this past week, the team's dismal play hasn't given lukewarm Knicks fans a reason to switch, but that all may change. Time Warner would then lose much of its leverage over the dispute.
Whether Lin is worth $71.4 million to the company or not, his $762,195 salary this year is a bargain. For jersey sales alone, Lin has been the #1 NBA jersey sold since February 4. Knicks' TV ratings are way up in the past week, and the pressure put on Time Warner Cable for the rate negotiations won't be known until a deal is signed. It's an incredible story for a great person, and all MSG investors are hoping it will continue.