saltybit Posted August 24, 2017 Share Posted August 24, 2017 http://www.yetanothervalueblog.com/2017/08/conversation-on-msg.html Consider a simple sum of its parts valuation for each of MSG’s four main businesses: Forbes currently values the Knicks and Rangers at $3.3 billion and $1.25 billion respectively. The Madison Square Garden arena was recently tax assessed at $1.2 billion (but that doesn’t include the value of the arena’s air rights). That’s already $5.7 billion. But don’t forget to add in $1.2 billion in net cash and investments, plus various other assets like the Rockettes and LA concert venue The Forum. Add it all together, Walker says, “Shares could double over the next couple years very easily.” Link to comment Share on other sites More sharing options...
villainx Posted August 24, 2017 Share Posted August 24, 2017 Thanks for reminding me about MSG! Link to comment Share on other sites More sharing options...
Gregmal Posted August 24, 2017 Share Posted August 24, 2017 This is a one of a kind, large margin of safety investment. Owned it for years and any 5-10% dip is a great buying opportunity. Link to comment Share on other sites More sharing options...
Gamecock-YT Posted August 25, 2017 Share Posted August 25, 2017 If only Dolan would sell the teams to someone who knew what they were doing. Link to comment Share on other sites More sharing options...
Gregmal Posted September 5, 2017 Share Posted September 5, 2017 Rockets apparently just sold for 2.2B Link to comment Share on other sites More sharing options...
rtvinvest Posted September 8, 2017 Share Posted September 8, 2017 Knowing nothing about valuing sports teams: why would a team be worth such high multiples of operating income? I understand there's a tax write-off, but even considering this I'm interested to find out whether it's peer multiples/bragging rights based or that there's significant FCF growth expected? Link to comment Share on other sites More sharing options...
Gregmal Posted September 8, 2017 Share Posted September 8, 2017 Knowing nothing about valuing sports teams: why would a team be worth such high multiples of operating income? I understand there's a tax write-off, but even considering this I'm interested to find out whether it's peer multiples/bragging rights based or that there's significant FCF growth expected? Trophy assets. They are one of a kind, and NY is the best market. Link to comment Share on other sites More sharing options...
saltybit Posted September 11, 2017 Author Share Posted September 11, 2017 https://www.streetinsider.com/dr/news.php?id=13282157 Analyst Speculation: Dolan Family Could Consider Sale of Knicks and/or Rangers - BTIG (MSG) Link to comment Share on other sites More sharing options...
mcmaaaaath Posted September 12, 2017 Share Posted September 12, 2017 Knowing nothing about valuing sports teams: why would a team be worth such high multiples of operating income? I understand there's a tax write-off, but even considering this I'm interested to find out whether it's peer multiples/bragging rights based or that there's significant FCF growth expected? Trophy assets. They are one of a kind, and NY is the best market. So there really is no DCF that can justify these values? They are basically like pieces of fine art or gold? Link to comment Share on other sites More sharing options...
vox Posted September 12, 2017 Share Posted September 12, 2017 Forbes reported that the Knicks revenue was $376 million and operating profit was $141 million. That was in the first year of the new ESPN-Turner TV deal. A $3.5 billion - $4.5 billion valuation doesn't seem crazy if you believe a new owner could improve the team's performance. https://www.forbes.com/teams/new-york-knicks/ Link to comment Share on other sites More sharing options...
Jurgis Posted September 12, 2017 Share Posted September 12, 2017 Forbes reported that the Knicks revenue was $376 million and operating profit was $141 million. That was in the first year of the new ESPN-Turner TV deal. A $3.5 billion - $4.5 billion valuation doesn't seem crazy if you believe a new owner could improve the team's performance. https://www.forbes.com/teams/new-york-knicks/ I am no expert on sports teams. I have owned BATRA stock and still own Exor stock that owns Juventus. IMO to improve team's performance you have to plow money into it. Moneyball does not work anymore since most teams are doing it at least partially and it's not as simple as the book claims anyway (there was a long article on this, I don't have ref anymore). So, yeah sports teams valuations are IMO way higher as trophy assets than as cash flow generators. It may be possible to buy them for cash flow if you do something like BATRA where team just breaks even, but company makes money on the stadium/tv rights/whatever. But that does not mean just buying naked team for CF. Link to comment Share on other sites More sharing options...
vox Posted September 12, 2017 Share Posted September 12, 2017 I think the Knicks have a tremendous advantage in building a better team in that it's one of the most highly desirable locations for free agents, both from a lifestyle and business opportunity standpoint and Madison Square Garden is regarded as the greatest basketball arena. With a change in ownership and management, I think it would be the premier free agent destination. The Knicks haven't made the playoffs in the last four years even though 16 of the NBA's 30 teams make it each year, and they play in the weak Eastern Conference. ESPN did a story where they estimated each NBA finals playoff game to be worth $11 million to the Golden State Warriors. By that math, even a run to the conference semifinals would significantly improve the team's operating income. http://www.espn.com/nba/story/_/id/19565518/nba-playoffs-warriors-sweep-bottom-line-not-look-wonderful Link to comment Share on other sites More sharing options...
Gregmal Posted October 16, 2017 Share Posted October 16, 2017 Nets rumored to be going for 2B+ WITHOUT the arena. There's starting to become enough evidence to say the Knicks are worth 4B+ by themselves. Link to comment Share on other sites More sharing options...
Gregmal Posted November 4, 2017 Share Posted November 4, 2017 Earnings out today continued to show improvement in the financials. Also been a lot of rumoured activism going on here behind the scenes. Considering Dolan really wants the Knicks to himself, and this trading at a big discount to SOTP, one would be hard pressed to find a safer investment in today's market. Link to comment Share on other sites More sharing options...
Gregmal Posted December 5, 2017 Share Posted December 5, 2017 http://www.espn.com/nhl/story/_/id/21678322/forbes-says-new-york-rangers-again-nhl-most-valuable-team-15b Rangers pegged at 1.5B Link to comment Share on other sites More sharing options...
Gregmal Posted December 8, 2017 Share Posted December 8, 2017 http://www.espn.com/nhl/story/_/id/21704910/dallas-billionaire-tom-dundon-agrees-buy-carolina-hurricanes Hurricanes said to have gotten about a $500m valuation. Probably one of the most obscure teams in the league. From what I've always been told, Dolan loves the Knicks but doesn't really give a shit about the Rangers. Wouldn't be totally shocked if he put them out there looking for about $2B. Link to comment Share on other sites More sharing options...
no_free_lunch Posted December 8, 2017 Share Posted December 8, 2017 Do you have any thoughts on the CEO departure? Is capital allocation done by Nolan? I am going to have to watch this one from the sidelines for the time being but I suspect you will do well on this one. It seems that as the US gets richer and richer the number of sports teams is relatively static. So you have competition for a rare asset. It might not make sense to a value investor but I think it is likely that the valuations gradually (or not so gradually) work their way up. I mean if someone will pay $400m for a painting why not $2b for a major sports team. Link to comment Share on other sites More sharing options...
Gregmal Posted December 8, 2017 Share Posted December 8, 2017 Do you have any thoughts on the CEO departure? Is capital allocation done by Nolan? I am going to have to watch this one from the sidelines for the time being but I suspect you will do well on this one. It seems that as the US gets richer and richer the number of sports teams is relatively static. So you have competition for a rare asset. It might not make sense to a value investor but I think it is likely that the valuations gradually (or not so gradually) work their way up. I mean if someone will pay $400m for a painting why not $2b for a major sports team. From my understanding it is the Board, with the general direction nudged by Dolan. The CEO departure was a little surprising, but if there is a company where the management team really isn't all that important to me, it is this one. Its never going to be an EPS darling. Operationally they never really make a ton of money. It's solely about one of a kind assets and being given by my estimates, at least a 30-50% discount. I've been a part of this basically since the spin from Cablevision. I still own MSGN and added to it recently. Thats the cash flow monster. I almost feel as if the split of MSG and MSGN was a stupid short term move done to appease the Wall Street jerk offs. Sperately, MSGN is a machine, but boring. MSG is exciting and unique but really doesnt make much money. As one they were kind of perfect IMO because they each balanced out the weaknesses of the other. I'd also mention, that for all the crap Dolan gets for being a whacko, the part about him being anti shareholder is a classic misconception. Take a peak at how you'd have done being invested in any of the Dolan companies or spin outs. The track record is pretty awesome. MSG is his baby. Link to comment Share on other sites More sharing options...
Gregmal Posted May 14, 2018 Share Posted May 14, 2018 https://nypost.com/2018/05/14/mark-cuban-supreme-court-just-doubled-my-teams-value/ Link to comment Share on other sites More sharing options...
Guest Schwab711 Posted May 14, 2018 Share Posted May 14, 2018 If 100% of shared net revenues from gambling (split evenly across 3 major leagues) goes to EBIT, it will increase the Knicks' EBIT by ~3%. Link to comment Share on other sites More sharing options...
Gregmal Posted June 27, 2018 Share Posted June 27, 2018 https://www.cnbc.com/2018/06/27/madison-square-garden-approves-plan-to-explore-spin-off-of-sports-busi.html Printing money. Probably the easiest investment I've ever come across. Link to comment Share on other sites More sharing options...
no_free_lunch Posted August 23, 2018 Share Posted August 23, 2018 I have no position but came across this link. Just want to post the numbers in case there is a sell off. Imperial Capital's David Miller initiated coverage of Madison Square Garden with an Outperform rating and $372 price target. The Thesis MSG boasts a unique attribute that makes the stock attractive, Miller said in a Tuesday note: it's an "asset aggregation story," and the value of all assets under its umbrella by default increase in value with economic growth. Traditional valuation metrics like EBIT and EPS multiples are "generally irrelevant," and the stock should be valued based on a sum-of-the-parts model as follows, the analyst said: New York Knicks at $3.24 billion. New York Rangers at $1.56 billion. Entertainment business at $1.29 billion. Real estate (2.5 city blocks in Manhattan) at $1.22 billion. Air rights at $550 million. A "conservative" negative value to the NY Liberty, Counter Logic Gaming and Connecticut Whale franchises. Long-term debt of $104.3 million. Cash of $1.25 billion. Total asset value of $8.85488 billion, or $371.91 per share. https://www.benzinga.com/analyst-ratings/analyst-color/18/08/12236711/madison-square-garden-trading-at-discount-to-intrinsic- Link to comment Share on other sites More sharing options...
Gregmal Posted October 4, 2018 Share Posted October 4, 2018 Going ahead with the spin off. https://nypost.com/2018/10/04/msg-moving-ahead-with-plans-to-spin-off-the-knicks-and-rangers/ Link to comment Share on other sites More sharing options...
Gregmal Posted November 5, 2018 Share Posted November 5, 2018 https://seekingalpha.com/filing/4223697 Silver Lake now at 7.4% Link to comment Share on other sites More sharing options...
Gregmal Posted December 11, 2018 Share Posted December 11, 2018 Silver Lake keeps buying, #metoo https://seekingalpha.com/filing/4263971 Link to comment Share on other sites More sharing options...
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