This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Sell Madison Square Garden If the Rangers Lose?

NEW YORK ( TheStreet) -- Another Game Seven goes off Thursday night in the National Hockey League playoffs. The New York Rangers host the Ottawa Senators at Madison Square Garden.

I am working feverishly to ensure that I am firmly planted on the couch by 4:30 p.m. PT with Molson Canadian in hand. There might not be a better time of the year than the NHL's second season.

I happen to be a Toronto Maple Leafs fan. This, however, does not mean that I dislike all other Canadian franchises. In fact, when the Leafs are out of the race (every year), I root for Canadian teams. I was born in Western New York, but have always identified in many ways with Canadian culture.

Right now, the Sens are the last Canadian team standing. Up until yesterday, I was preparing to root for them to win this evening. Then, I read an article by Mike Ozanian in Forbes, titled: Senators Set to Extract $300 Million from Madison Square Garden Shareholders.

Mike wrote a nice article, but he did leave several things out. He estimates that every time the Rangers host a playoff game, Madison Square Garden (MSG - Get Report), the company, nets $1 million income. He extrapolates this out using the following math: If the Rangers go to the Cup they'll play at least 10 more games. MSG trades for 33 times earnings, so that would shave about $330 million worth of value from the company's market cap.

That's not an exact science because Ozanian fails to factor in cost savings related to less hockey and the fact that the MSG-owned New York Knicks have already clinched a playoff spot. Postseason revenue from basketball should help offset any hockey-related losses.

It's not just that MSG owns the Rangers and the Knicks and the arena the teams play in. The company also owns the stable of Madison Square Garden television networks that air the games. So, we're talking about some serious synergy between revenue streams.

Ozanian points out that losing Rangers revenue because of a first round exit could hit MSG hard, particularly because the company saw net income decline by $5 million between the first six months of fiscal year 2011 and the first six months of fiscal year 2012. What Ozanian does not explain is that you can attribute this loss primarily to the labor dispute that cut the NBA season short.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
MSG $85.96 0.00%
AAPL $132.54 0.00%
FB $80.54 0.00%
GOOG $540.11 0.00%
TSLA $247.73 0.00%

Markets

DOW 18,232.02 -53.72 -0.29%
S&P 500 2,126.06 -4.76 -0.22%
NASDAQ 5,089.3620 -1.4320 -0.03%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs