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Why Linsanity may have been worth more to Houston than New York

Jul 21, 2012, 11:30 AM EST

Houston Rockets Introduce Jeremy Lin Getty Images

When the New York Knicks told Jeremy Lin “don’t let Raymond Felton hit you in the backside on the way out,” the talk was a cacophony of shock. Whether you agreed with the move or not, it was a huge surprise that the Knicks wouldn’t match the offer sheet for Lin. If you thought Lin was worth it, you were shocked the Knicks would let a star like Lin walk after everything he did for the franchise last year. If you thought he wasn’t worth it, you were surprised Dolan actually made a decision with consideration for the money.

More than anything, people on both sides were shocked that Dolan let Lin’s marketing potential head to the Lonestar State. Lin was a huge center of attention, which meant money, last season, and merchandise for Lin sold out everywhere. How could the Knicks let something with that kind of marketing potential go? ESPN, in a five-part series this week, noted that that element was considered by the Knicks and it sheds some light on how the league’s financial structure affects these things.

Furthermore, the Knicks calculated that Linsanity might not be worth as much as assumed. While the value of the Lin phenonemon has been much discussed, the Knicks saw it differently from most observers. Their season-ticket sales were strong and their sponsorships were stronger. Any money from the sale of Lin jerseys or Knicks’ merchandise around the world goes into a leaguewide pool, with the Knicks getting the same portion as any other team, according to revenue-sharing rules. Likewise, their share of the league’s TV contracts would not change whether Lin was on the team or not, no matter how many people in New York or Asia were watching.

via NBA — Jeremy Lin Six Degrees Of Separation, New York Knicks – ESPN.

Essentially, Lin wasn’t going to help MSG sell tickets. The Knicks already sell out. It’s the gift and curse of Knicks fans. They’re great, in that they show up no matter how bad the team is and go bonkers when the team is any good and/or has any stars. But it also means the Knicks don’t have to make moves with consideration to selling tickets, because they don’t have to worry about it. But a lot of teams make bad moves trying to sell tickets. The Brooklyn Nets just spent $300 million on a team that isn’t a title contender in order to push ticket sales. And that’s the right move for them, but MSG isn’t in the same bucket.

Likewise, not being able to make any money off the revenue stream of merchandise, and in fact subsidizing the other teams has to have very little appeal to the Knicks. Yes, there are other revenue streams involved with Lin’s popularity that don’t get put into the league pool. But again, the Knicks have already maximized those streams. That’s the real problem. It’s like trying to get someone who’s loaded a gift for their birthday. What do you get the team that has everything (except a title, an offense, and a star willing to relinquish control)?

Houston, on the other hand, can use Lin’s star power. His fame will help them sell sponsorships and put butts in seats. The only person that really loses money in this configuration is Lin, who won’t make as much in Houston off his fame and that trademarked “Linsanity” term as he would in New York. But he got a great deal, and that marketing money will dry up eventually.

So maybe this deal, while not all about the money at all, as ESPN’s feature illustrates, wasn’t so bad on the financial end for anyone. But it’s interesting to see the dynamics in play.

  1. dylude - Jul 21, 2012 at 12:24 PM

    Texas doesn’t have state income taxes…. That’s extra millions in his pocket regardless of performance.

    New York has high state income taxes and a fickle fan base that revolts easily, and the cost of living is much much higher.

    I think it’s closer to a push than outright guarantee he would make more overall money in New York.

    • akmgiants - Jul 21, 2012 at 1:00 PM

      the cost of livings more, but seriously, Nyc or Houston? not even a comparison.

      • drunkenjunk - Jul 21, 2012 at 1:58 PM

        Yea, a lot of people would pick Houston. Not everybody wants to live in NYC. The rest of the state is a dump.

    • Mr. Wright 212 - Jul 21, 2012 at 2:03 PM

      Ahh the outta town inferiority complex yokels always with (highly inaccurate at that) shots at New York and it’s sports fans. Fickle? SERIOUSLY?

      No one is clawing to live in Houston. But your transplant yokel cousins move here and actually make the cost of living higher than what it is, because you overpay for EVERYTHING and make it worse for us natives.

      Just in case you didn’t want ths truth to get in the way of your tripe, that is…

      • reneg4de7 - Jul 21, 2012 at 3:15 PM

        Seriously, There are parts of Long Island that this hick couldn’t dream about in his

        Double Wide Trailer on the outskirts of some Kentucky town.

      • bigmeechy74 - Jul 21, 2012 at 4:00 PM

        Overpay for everything? What does that mean? You guys haggle for everything up there? Where i’m from 9 times out of 10 the merchant puts a price tag on an item and the customer pays it.

    • hojo20 - Jul 21, 2012 at 4:28 PM

      Yeah plus Lin doesn’t have to play in front of the annoying Knicks mascot Spike Lee.

    • jolink653 - Jul 21, 2012 at 8:46 PM

      Fickle fan base? Do you actually know any New York fans? Because the Knicks have been a disgrace for the last decade and the Garden still sells out just about every game and season ticket subscriptions have gone up…We may have some bad teams here but the fans stick with them regardless of how long it takes for them to turn it around

    • bozosforall - Jul 22, 2012 at 9:54 PM

      Dyluded…you must have missed the part where the Knicks sell out nearly every game, whether or not the team is any good. Juxtapose that with a fickle fan base such as Boston’s who only sell out games if the team is any good. A few bad seasons and the Boston fans crawl back under their rocks.

  2. cantonbound13 - Jul 21, 2012 at 12:43 PM

    Houston is currently a lottery team, not a shot at Lin, but his supporting cast is very young & they are clearly rebuilding. The Knicks could be a top 4 team in the east. That’s why Houston needed him more.

    • reneg4de7 - Jul 21, 2012 at 3:16 PM

      Agreed, They can build around a core of Lin and high draft picks. The west is too good for them to be competing for an 8’th seed any time soon

  3. cuffhimbanano - Jul 21, 2012 at 12:49 PM

    I liked the part where you called Lin a star. That was funny.

  4. thekingdave - Jul 21, 2012 at 2:21 PM

    He’s only responding to one of your cocky NY brethren. As far as Texan transplants coming to NY, that has to be one of the stupidest things I’ve ever read on PBT and a complete 180 from the truth. Have you been to Houston? All you people from NY, Chicago, etc leave your “great metropolitan homes” to take advantage of our always strong economy. You’re loud, obnoxious, make our fan base appear to be fickle, and clog up our sports talk radio with your annoying accents and sports IQ. If the Big Apple’s so great, stay there.

    • badintent - Jul 22, 2012 at 3:16 AM

      Your city is a toilet bowl compared to Dallas or Austin, oil jocky. Way too much chemical pollution, “spagetti highways”, Lousy football fans, You lost the Oilers !. Your Mardi Gras is a joke compared to N.O. Lets face it, a good hurricane is what you need to wash out all the N.O. scum that stayed there after the Katrina and drove up crime rates double digits. And for accents you all sound like trailer trash to me. Now that the WALL STreet banks are financing your refineries, and making huge $$ on the oil futures, we control your city, top to bottom. I’ve been to Houston, wasted 3 days of my life.

  5. dysraw1 - Jul 21, 2012 at 2:27 PM

    ok now you are just saying his name to get blog hits

  6. knightrider1755 - Jul 21, 2012 at 3:27 PM

    Dolan owns the television network that airs the Knicks games. How about the revenues Dolan would have collected for allowing Knicks games to be broadcasted via television and radio in China?.

    • george3246 - Jul 21, 2012 at 4:53 PM

      That’s a good point, Knight.

      But how many connections do you think Houston has already made in China during the Yao Ming years? I’ve heard that the Chinese population in Houston was one of their largest communities in the nation.

      I think that Lin will be a lot better off playing point guard in Houston than NYC for two major reasons, Melo & Amaury, whom have been known to be notorious ball hogs on offense and slackers on defense. Of course, that’s provided that Jeremy plays with the same intensity and skill that he showed as he became Linsanity.

      And if you haven’t lived in Houston during Texas summers that have had about a month of 100 degree temperature days for each of the last three years w/ humidity that feels like an outdoor sauna bath, think twice about touting Houston living.

  7. longtallsam - Jul 21, 2012 at 3:38 PM

    If I had to rank all the places in the US to live, NYC would be in my bottom ten. Not everyone wants to live is a huge city with millions of rude people. Add to that the ridiclous cost of living there, and you can have it!

    1

  8. Mr. Jones - Jul 21, 2012 at 4:09 PM

    Reblogged this on Sports w/ KJ.

  9. ajpurp - Jul 21, 2012 at 7:10 PM

    New York is an amazing town, I don’t live there and the people are absolutely terrible although it doesn’t apply to all. Just like Philly, the city itself is awesome but the people are worse than NY, city of brother love is a joke. It doesn’t mean the cities themselves are not incredible, they have everything you could possibly want except peace and quiet but that’s why people go on vacation anyway, plus the rest of NY being trashy? Really? New York as a state is absolutely beautiful. If you live outside the City it’s perfect nice clean, trees rivers beautiful quiet and you have the city a hop a way where you can do anything you’ve ever dreamed of. I mean come on.

  10. andrewproughcfe - Jul 22, 2012 at 12:37 AM

    Having been to China quite a few times, I can tell you from my experience that Yao Ming is bigger in China than Jordan is in America. I was over there when the Rockets were playing the Lakers in the playoffs, and over 100 million Chinese supposedly tuned in to watch one NBA playoff game. I would be shocked if Yao isn’t pulling in tens of millions per year in endorsement deals all over Asia.

    I don’t think Lin has anything to worry about in terms of marketing dollars – the real money for him is probably not in New York – its in Beijing, Shanghai, and a hundred other giant Chinese cities. And they are probably just as happy to see him put on Yao’s old team colors. China probably knows a lot more about the Rockets than they do about the Knicks.

    • andrewproughcfe - Jul 22, 2012 at 12:45 AM

      Interesting insight into Yao the billionaire:

      http://www.channelnewsasia.com/stories/afp_sports/view/1140217/1/.html

      “Yao routinely tops Forbes’ list of China’s most valuable celebrities and his global appeal has led to endorsement deals with Nike, Pepsi, McDonald’s and China Telecom. His personal brand is valued at more than $1 billion, his lawyers once told a court in the central city of Wuhan, where he sued a sportswear firm for selling a brand called “Yao Ming Generation” without his permission. “Yao’s commercial value is unlikely to shrink in the near term. Yao’s value surpasses the sport itself”.

      Wow – his “value surpasses the sport itself”. Brush up on your Mandarin, Mr. Lin.

    • badintent - Jul 22, 2012 at 3:19 AM

      100 % right. But try explaining that to guys that have to scrap cow or horse dung off their boots all the time. Wast of time.

  11. omniusprime - Jul 22, 2012 at 8:56 AM

    While things may be big in texas, there’s nothing in texas as big as the amount of BS being shovel;ed by Matt Moore in this insipid article. There’s nothing as big as the vacuum between Matt’s ears as he tries yet again to promote Linept as some kind of NBA basketball star, yeah a falling star. Sorry but a couple of good games does not make a great NBA star, it takes years to prove a player has star quality. Linept will go back to being the mediocre player he’s always been and Matt Moore will continue to be the same mediocre sports pundit he’s always been. I do feel sorry that Linept has been exiled to texas but he belongs there.

  12. xLith - Jul 22, 2012 at 8:21 PM

    “The only person that really loses money in this configuration is Lin, who won’t make as much in Houston off his fame and that trademarked “Linsanity” term as he would in New York. ”

    Did you guys ever hear of Yao Ming? You do know that the Rockets are like China’s NBA team right? He’s going to make as much if not MORE here due to the Asian fanbase that still follows the Rockets. Even after Yao’s retirement, there’s a HUGE Asian fanbase here.

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