Monday, February 13, 2012

Jeremy Lin's impact on MSG part 2

If you listened to my blog last Thursday, congratulation! you are up 7% already. After I did a more careful analysis, I believe the impact on MSG bottom line from Lin will be 30 million this year
1. the increased average price for ticket. The price increse is about 26% already. Which translate to 800,000 to one million dollar per game. For the remailing of the season, it will be about 20 million.
2. Merchandise sales. Total earning impacts will be at least 5 million. Assume MSG get net $1-3 for every t-shirt or other stuff sold.
3. Increased ticket sale. Assume 2000 more tickets sold every game @the average price of 180, that's another 7 million
4. TV rights to Asia countries. That's at least 3 million dollar.
5. Advertisement on the Madison Square Garden, minimum increase by 2 million.
6. Deeper into the playoff, easily 3 million.
Some intangibles. Put pressure on Time Warner to reach cable deal.

For next season, the impact on earning will be double minus his salary, assuming 15 million. Jeremy is 23, if he can do this until he is 30. The total financial impact will be at least 350 million on MSG bottom line. The total share outstanding is 77 million, so the stock should increase by 5 dollars from his impact. I increased my target to $35.

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