You can't value sports teams based upon cash-flow and EBITDA. I doubt that Russian guy who is buying the Nets has ever heard of EBITDA. An argument can be made that someone might buy the equity in a sports franchise even if not one dime of cash-flow ever made it to their pockets.
I had been hoping that this thing would get down to the stated value of the sports franchises. That was probably being too greedy.
You are living in a fantasy world of "My dad can beat up your dad." You think the world revolves around New York so that everything here is more profitable.
You make up dumb crab like bad NBA teams drawing 5,000. Stop the stupid hyperbole.
The Knicks sell out, which is a problem. They have no room to improve ticket sales. Their ratings have always been crappy compared to basketball teams in other cities and compared to the Yankees and Mets. When the Mets were awful and the Knicks had Ewing at his peak the Mets outdrew the Mets on television by more than 60%. The disaster for MSG was losing the Yankees and the Mets. If you had really covered CVC you would have known that.
There is no private market value for the Knicks. The Dolans aren't sellers. They have the public financing 75% of the equity for them. If you were really a professional investor you would have known that.
The last several basketball team sales have been at losses or been aborted. You can have your fantasy but that's all it is, a fantasy.
The Knicks, Rangers, MSG building and MSG networks can't be separated. Every team in the New York area and all teams nationwide now own their stadiums or have long term government subsidized leases. Any buyer of the Knicks and Rangers would immediately threated to leave the MSG building. That's why no one would buy them separately (Knicks and Rangers were created by owners of MSG, they've always been owned by the same company as their building) from the building, because no one is stupid enough to sell the teams and keep the building unless the teams were saddled with a very bad lease long term for the teams (and good lease for MSG building owner) before selling the teams.
"james Dolan is incapable of running a hot dog cart. To trust him with MSG is absurd"
Lets get the discussion on this company moving.
From my research it appears that Jimmy doesn't have the greatest track record. It also appears that the CEO is more of a Dolan flunkey than a guy with hard-core experience running entertainment assets. However at least some of that is built into the stock.
Part of the problem is that Jimmy has always been able to hide behind Cablevisions prodigious cash-flows. On conference calls the questions would always be about ARPU for cablevision as opposed to how the MSG rennovation was going. MSG execs aren't going to have that luxury. They are now going to be forced to answer hard questions from analysts or face embarrassment. Jimmy Dolan will either have to make better decisions or hire people who can, because this time there will be much more public scruitiny on him and the MSG assets.
According to Forbes the Knicks and the Rangers are worth approximately $1B togeather or $16.34 per share. I don't think their valuation includes the arena or MSG and this would likely rise if the Knicks sign Lebron James.
Also, I believe that many former Cablevision shareholders are dumping their MSG shares because they prefer the more stable cash flows of Cablevision and because Cablevision is a takeover play. MSG on the other hand has much more valuable assets, but will have lumpier cash-flows and isn't likely to be taken over.
These reasons however have nothing to do with what MSG is actually worth. When shareholders start to dump shares for uneconomic reasons that usually can signal an opportunity.
Right now if you assume that MSG will draw down its entire $375M facility and keep it drawn down, MSG ex-the Rangers and Knicks is trading at $8 a share.