It may have occurred to JAT Capital Management that if L.A.’s second-most popular basketball team is worth $2 billion, than New York’s most popular must be worth eleventy gillion dollars, or at least significantly more than $2 billion. So they’ve bought up a few Madison Square Garden shares to have some “constructive” chats with the Dolans about wrestling some “long-term value” out of the things. Perhaps by selling the Knicks to an ownership group that offers fans a real hope of a championship in their grandchildren’s lifetime.
Of course, the Dolans don’t have to have any chats of any kind with anyone who buys MSG shares, because even if someone were to buy all of the available MSG shares, he or she or it would still only have a 31% voting interest in the company. So Knicks fans will have to hope that Phil Jackson can succeed where Steve Mills and Glen Grunwald and Donnie Walsh and Isaiah Thomas and Scott Layden and Ernie Grunfeld and Dave Checketts and Richard Evans and Jack Krumpe and Mike Burke before him have failed.
One estimate put the Knicks value at $3 billion, which would account for 3/5 of MSG’s total market cap at this point. (MSG also owns the New York Rangers, the WNBA’s New York Liberty and the MSG television networks.)
Still, anyone trying to get the Knicks sold would have to get through the Dolan defense. The family, with James Dolan running the show as executive chairman, controls 69% of the voting power at MSG thanks to the Class B shares.
Could the Knicks Be an Activist Play at Madison Square Garden? [WSJ MoneyBeat blog]