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Jeremy Lin will no longer be playing his home games in Madison Square Garden. And MSG stock is already feeling his absence.
Shares of The Madison Square Garden Company (NYSE: MSG) have tumbled 3.5% this week since it became clear that the New York Knicks were not going to re-sign star point guard Jeremy Lin.
Lin became an overnight sensation last NBA season after exploding on the scene from relative obscurity to help guide the Knicks to a playoff spot. The sudden emergence of the Asian-American Harvard graduate spawned a phenomenon known as “Linsanity”, boosted the MSG Network to record TV ratings and pushed shares of the company that owns both the network and the World’s Most Famous Arena up more than 25%.
Put simply, Lin became the most popular player to wear a New York Knicks uniform since Patrick Ewing.
But as quickly as Linsanity took hold of the City That Never Sleeps, it has ended just as abruptly.
The Knicks failed to re-sign their young star, allowing Lin to sign a three-year deal with the Houston Rockets. It became clear early this week that the Knicks wouldn’t be bringing Lin back. MSG stock has steadily declined ever since.
But even without Linsanity, MSG shares aren’t doomed. The company still made a profit of $83 million in 2010 – when Lin was an unknown NBA rookie just trying to make it in the league.
The Knicks have been selling out Madison Square Garden and pulling in ratings for years. And they’re not the building’s only tenants. The New York Rangers also play in MSG – and they’re fresh off a season in which they advanced all the way to the NHL’s Eastern Conference Finals.
MSG also plays host to numerous concerts and other events, too.
So while lights out for Linsanity seems like a major blow to MSG now, the stock should be fine. After all, Madison Square Garden was the World’s Most Famous Arena long before Jeremy Lin was even born.