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How Manchester United, Knicks Wins Correlate With Stock Gains

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How Manchester United, Knicks Wins Correlate With Stock Gains
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It looks like another losing season for the New York Knicks.

More than halfway through their 2017-2018 schedule, the team ranks 11th in the NBA’s Eastern Conference with a 24-38 record. If they stay on pace, they’ll finish their fifth consecutive losing season and potentially miss their fourth consecutive playoffs.

Their cousin New York Rangers are faring little better. Now ranked last in the NHL’s Metropolitan Division, the team recently broke a seven-game losing streak to pull a 28-36 record.

Fortunately for Madison Square Garden Co (NYSE: MSG), which is technically the owner of both teams, its performance doesn’t correlate with wins and losses. The company’s stock is up 11.4 percent since its teams’ October season openers.

And after nearly two-and-a-half years as a public company, during which time the Knicks finished two seasons 32-50 and 32-51 offset by the Rangers 46-27 and 48-28, Madison Square Garden has risen 43 percent.

A Common Disconnect

The trend follows for Rogers Communications Inc. (USA) (NYSE: RCI), which acquired the Toronto Blue Jays in 2004. The Blue Jays’ 2015 MLB season, which brought their best record and first playoff appearance since 1993, saw Rogers close the year at its five-year nadir.

For both professional sports owners, winning streaks have prompted no pops, and deeper descents into sub-.500 seasons haven't fazed investors.

That divide isn't necessarily ideal, though. Rogers management has expressed a desire to see the stock price more solidly reflect the team value.

It’s worth noting, though, that the large corporations have diversified assets beyond their respective teams. Rogers’ main business is telecommunications, and Madison Square Garden manages other teams and leagues as well as an entertainment unit.

The Exception

But one team owner, whose business isn't diluted by media brands or buffered from singular exposure to a season record, appears to be more closely financially tied to wins and losses.

Manchester United PLC (NYSE: MANU) is 18-5-5 (as of March 2) and ranks second in the Premier League table, and its stock trades near all-time highs. It doesn’t appear a mere coincidence. At the end of 2015, when the team suffered its worst run in 25 years, shares plummeted.

An overlaid graph of season records doesn’t exactly match the Manchester United stock chart, but some dips and pops suspiciously align.

Notably, both MSG and MANU have experienced cyclical slumps around the winter months, curiously corresponding with regular season play.

A Solid Value

Regardless of the extent of their stock contributions, the properties prove valuable.

The Knicks and Rangers topped the NBA and NHL lists of most valuable teams for the third straight year this year, with the latter worth $3.6 billion and the former $1.5 billion, according to Forbes.

Last year, the Blue Jays ranked No. 16 in the MLB at $1.3 billion, while Manchester United ranked No. 1 at $3.689 billion.

Related Links:

Analyst: Why Jim Dolan Could Sell The New York Knicks

Houston Rockets' $2.2 Billion Sale Boosts MSG's Stock

Photo from Wikimedia. 

Posted-In: Knicks MLB NBA New York KnicksEducation Sports Top Stories General Best of Benzinga

 

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