Feb 14, 2012, 8:50 AM EDT
The NBA is a business. First and foremost. If you ever forget that, think back to early November when we should have had the start of the NBA season and instead had lawyers in suits hammering out a labor agreement.
Jeremy Lin is the kind of player, the kind of story that can make you forget the NBA is all business.
But this is all tied to money, too.
The Madison Square Garden Company is making money, as reported by the New York Times.
On Monday, shares of Madison Square Garden Company, which owns the Knicks, the arena where they play and the cable network that broadcasts their games, hit a record high because of the sudden emergence of Jeremy Lin, the team’s previously unknown point guard.
Shares of MSG rose 3.8 percent Monday to a record-high $32.32, with three times the average number of shares being traded.
Jeremy Lin jerseys are suddenly a hot item, and more simply Knicks fans buy MSG stock when the team is good. Also, Madison Square Garden is also locked in a fee dispute with Time Warner Cable that has Time Warner not carrying MSG Network — and Knicks games — in large parts of New York City right now. Lin and his popularity give MSG leverage because ratings are up 66 percent in recent games.
Forbes broke down the Lin impact this way — and notes his personal brand is now worth a lot.
The Knicks had $226 million of revenue during the 2010-11 season, roughly equating to 20% of MSG’s overall revenue. Obviously, you cannot assign Lin one-fifth ($28 million) of MSG’s $139 million increase in market value since he began his magical run (in the past we have determined athlete brand values are the amount by which their endorsement income exceeds the average of the top peers in their sport, but that methodology can’t be applied to Lin, who was a no-name player until very recently).
But we can still get a reasonable estimate. The New York Times reports that Lin has helped push up television ratings for the Knicks 66% over last season. So if we give Lin credit for half of the $28 million, his brand weighs in at $14 million, which would place him tied with Bryant for sixth among the top athlete brands in the world.
But it’s more than the suits — Lin can make money, too. The American of Taiwanese descent can make more money off the court than on it, particularly in China where state-run television are showing his games already. Reuters looked into that.
“There’s no question brands will be interested in Jeremy Lin,” Jeremy Walker, head of sports marketing and branded entertainment for GolinHarris, told Reuters by telephone from Hong Kong on Monday.
“You only have to look at what Yao Ming has done not just for the NBA but for brands that he represents both in the States and in China. Every top Chinese star that comes out from the Olympic Games or wherever it might be, there’s always going to be an awful lot of interest for brands because all the major brands in the world are still looking to China for growth.
“A lot of brands want that positive ‘halo effect’ association they are going to get from being involved with a superstar.”
Yao made a lot of money endorsing Pepsi, Reebok shoes and more in China. You can bet at Harvard they taught Lin something about brand marketing and how to make money. He’s going to get an NBA raise next season, but soon that may be the smaller share of his income.
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