MSG Media, a unit of Madison Square Garden, which owns the team, is expected to see operating profit decline by $7.2 million this season due to lower ad revenue on MSG Network — thanks to an 11 percent decline in ratings, the analyst, Rich Tullo, wrote in a note to clients.
“[W]e think MSG takes a revenue hit on poor Knicks play,” writes Tullo, an analyst with Albert Fried & Co.
Tullo estimates that MSG will lose $6 million in ad revenue in the three months ending Dec. 31, dropping to $188 million, plus another $6 million in the following quarter.
With MSG Media operating at a 60 percent profit margin, the lost revenue translated into $7.2 million in lost operating profit, Tullo noted.
OK, so that is what it is. But how embarrassing is it when a noted Wall Street Analyst starts making jokes at your expense there Phil Jackson? Tullo added this nugget:
“A strong Rangers performance could offset a Knicks team that apparently forgot how to play basketball in the NBA."
Bam.
Don't cry for MSG though, MSG Media has an estimated private market value of $3.39 billion, according to an analysis by Morgan Stanley analyst Ben Swinburne. Swinburne pegs the Knicks’ value at $2.25 billion and the Rangers’ at $700 million.
And venues, which include the Beacon Theater and Radio City, could fetch $1.48 billion, he added.
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