Madison Square Garden Company (Nasdaq: MSG) shares appeared unaffected Wednesday by Jeremy Lin's departure from the MSG's New York Knicks, despite considerable hype surrounding the point guard's economic boost to the company's bottom line.
Shares opened at $35.50 and by mid-afternoon had slid to $35.36, a change of less than 0.4 percent.
Wall Street analysts, who have stated that the Harvard graduate's economic impact was overstated were not surprised by the market's yawn at Lin's departure for the Houston Rockets.
She believes that the Knicks made the right decision to let Jeremy Lin sign with the Houston Rockets because the company's primary two revenue streams -- ticket sales and television deals -- are completely unaffected by Jeremy Lin.
Letting Jeremy Lin go is the right economic decision for MSG's stock, Martin said. He's so expensive that the revenue that they would lose would be half of the cost of keeping him.
That mentality goes against numerous journalists, including Five Thirty Eight's Nate Silver and the New York Observer's Foster Kramer, who have argued that it made financial sense for Madison Square Garden to retain Lin. Kramer, in a Tuesday evening post, put together charts that showed MSG's share price rising during the height of Lin's popularity, and conversely falling when it became clear the Knicks would not retain the popular point guard.
Silver pointed out that MSG gained approximately $600 million in market cap after Lin's first start, but an associate analyst for Stifel Nicolaus told the International Business Times those gains were based far more on the additional revenue brought in through Madison Square Garden's arena renovations than anything Lin brought to the bottom-line of the company.
If the Knicks re-signed Lin they would have been forced to pay him $14.8 million in salary for the 2014-15 season, and as much as $68 million in luxury tax payments.