A lot of investors may not be aware that there are some publicly traded sports franchises. Boyar Value Group President Jonathan Boyar tells Yahoo Finance Live that he like some of the names in the space, including The Liberty Braves Group.
Video Transcript
BRAD SMITH: Small cap stocks have been largely left behind in this year's market rally as AI and big tech have dominated the conversation. But as things pick up steam, some of those smaller cheaper names are starting to join the fund.
For a deep dive into these small cap stocks, we are bringing back in Jonathan Boyar, who is the Boyar Value Group president. Jonathan, all right, walk us through some of these small cap stocks because we were discussing Russell 2000 before this segment. But where within the small cap stocks are there particular themes that are emerging right now?
JONATHAN BOYER: Well, I think there are certainly themes, but I think it's important to do a stock-by-stock basis. But let's say one theme is publicly-traded sports franchises we discussed in the previous segment. You have Liberty Braves, which are going from a tracking stock to an asset-backed stock. It's controlled by media mogul John Malone. It's trading about $39 a share. We think it's probably in a sale worth the mid to high $50.
He is not an emotional owner. It is our belief that he will sell the team at the right price. He's not the kind of guy who's buying a team to sit on the front row and watch the game. He's a capitalist at heart, and I think shareholders will be rewarded. And then being in New York, you have the Madison Square Garden Sports, which owns the Knicks and the Rangers.
JULIE HYMAN: But there you do have an emotional owner, don't you?
JONATHAN BOYAR: A little bit. A little bit. But you have to remember, if you look at the history of the Dolans, one, they bought Madison Square Garden, which included the garden, the Knicks, the Rangers, everything for a few hundred million dollars. So they're savvy people. We were investors in Cablevision, and did quite well. And he sold it for a price that we never thought we would get.
So our bet is at some point in time, he either sells the entire team or he sells a stake in the team, which has become increasingly popular as you're seeing these private equity firms and sovereign wealth funds come into the fold. And that helps put a valuation on the teams. Right now, the enterprise value for the Knicks and the Rangers is $5.5 billion, which is ridiculous. The Knicks alone probably would go for over $8 billion if the sell.
JULIE HYMAN: Imagine if their record was better.
BRAD SMITH: Yeah.
JONATHAN BOYAR: They had a pretty good year this year.
JULIE HYMAN: Yeah.
JONATHAN BOYAR: But yes, they--
JULIE HYMAN: It's been.
JONATHAN BOYAR: If you're a Knick fan, it's been a long two decades.
BRAD SMITH: Oh, my goodness. Well, yeah, that's unfortunate for you guys who are rooting for the Knicks still in the year of our Lord, 2023. As we think about these small cap stocks right now too, is there more pick up among institutional versus retail from what we're seeing in the volumes and the inflows?
JONATHAN BOYAR: Yeah. I mean, I think for the institutions, they're probably for the most part buying the actual index. But for those stock picker's, yeah, no. I mean, people are finding ideas, and eventually people will flock to valuations. But a lot of these are ignored. One of the names that I mentioned in the last segment is Howard Hughes Corporation, which is controlled by Bill Ackman. Only five analysts cover the name. So it's not like the most widely--
JULIE HYMAN: The mall owner?
JONATHAN BOYAR: It used to be part of General Growth Properties, which was spun out. And that was one of Ackman's biggest successes. He now controls Howard Hughes Corporation, which really owns Master Plan Communities, some developments in Hawaii, as well as a South Street Seaport. And he just had-- he a tender offer earlier this year for a lot of shares.
It was oversubscribed. He just keeps buying back stock every time it hits 75, so there's that Ackman put there. And we think it's selling at a significant discount to NAV. And over time, that discount will narrow. And it wouldn't surprise us at some point in time if he has a publicly traded vehicle in Europe if he merges the two.
JULIE HYMAN: It's really interesting, the names that you've mentioned all, maybe coincidentally, are closely associated with big characters, Malone, Dolan, Ackman. Is that a coincidence? Is that something you kind look at to see what the advantages and disadvantages of that kind of ownership are?
JONATHAN BOYAR: You know, I think Dolan is in its own category. So I think that-- but yeah, I mean, we like to invest alongside owner operators or people with a lot of skin in the game. Malone hasn't had the best decade. A lot of his names haven't done as well. But historically, he's been a great person to invest alongside of. But we want to invest along with great assets. And all of these companies that I just discussed are trophy assets, and at some point in time value will be recognized, and you have a margin of safety there.
BRAD SMITH: If only they can win a trophy, those Knicks. My goodness.
JULIE HYMAN: Jonathan, good to see you. Thanks for coming in. Jonathan Boyar of the Boyar Value Group, thank you.
JONATHAN BOYAR: Thanks for having me.
