NEW YORK (TheStreet) -- Apple
(AAPL - Get Report) and Steve Ballmer, the former CEO of Microsoft
(MSFT - Get Report), have been in the news for their recent acquisitions.
Ballmer is now in the process of purchasing the Los Angeles Clippers. Apple, in a move that burnishes its "cool" image, is buying Beats Electronics, the headphones company with Dr. Dre as its "cultural barometer."
What's next? When the time is right, Microsoft should next go after Madison Square Garden (MSG), owner of "the world's most famous arena." Along with the legendary events arena, the company would bring basketball's New York Knicks, hockey's New York Rangers, a media segment and other valuable assets.
The purchase will pay for itself.
The Dallas Cowboys and the New York Mets are getting $20 million a year for the naming rights for their stadiums. Neither is in Manhattan and neither has the number of world-class events Madison Square Garden hosts.
Microsoft should not sell the naming rights -- it would garner billions in publicity that will have the acquisition more than pay for itself (present market cap of $4.42 billion). On a daily basis, Microsoft will get advertising in the most expensive media market in the world. There is no end to how Madison Square Garden can be used in product placement for Microsoft.
It allows for investing in three monopolies.As great as economic moats are for investing, monopolies are even better. Madison Square Garden comes with three: professional sports teams, an events arena in the world's financial capital and prime real estate in midtown Manhattan. It is difficult to think of any other single asset like this in the world. It is even more difficult to see how all will not rise substantially in value over the long term. For the first time, Microsoft takes the offensive against Apple in the "cool" campaign. New York City, specifically Manhattan, is cool. Mad Men, Sex in the City and Seinfeld are among the hit shows based here. The panache of Manhattan will rub off on Microsoft in the same way Steve Jobs cultivated the laid-back West Coast cool for Apple with his black turtleneck and offbeat diets, among other things.