The LeBron Thread

[drj]

We always knew NY was the place where LBJ could make the most money, just from the marketing boost. But it was never clear that this was going to be a very big boost. If this report is correct, the boost will be absolutely huge.

Pro athletes almost never leave money on the table. They all talk about "wanting to win a championship", but almost none of them ever sacrifice the big money, except maybe in their final year in a last attempt to chase a ring.

Things look good.

[willbcocks]

Unless he tampers, which could land him in jail, he won't be able to make any more money investing while playing on the knicks than he could with any other team. It's really a moot point.

[Knicksick]

Unless he tampers, which could land him in jail, he won't be able to make any more money investing while playing on the knicks than he could with any other team. It's really a moot point.

No it isn't and it is all legal. Now you can go back to visiting Arenas and his 120mill. contract in prison. Have fun with your criminal team.

[Subway Token]

That was actually pretty interesting and a pretty optimistic take. I don't agree with him planning this for 3 years already though. That's a bit far-fetched.

[PrecociousNeoph]

Frank Isola thanks you for your contribution to his blog. To view the finished version please check out Knicks Knation tomorrow morning. Thanks.

rofl

[patagonia]

Lebron could also make a ton of money by hinting he was coming to the Knicks, shorting the stock, and then signing with another team.

I think that also falls under insider trading

It would definitely make an interesting court case. He doesn't meet your traditional definition of an insider nor does it appear at first glance that he owes a fiduciary duty to MSG.

[PlayoffRose]

LBJ does not care about NYC market, or Chicago market for that matter. The guy is the face of the league. His endorsement money is through the roof, even if he plays for the Memphis Grizzlies.

The mother of all market is the 350-400 millions of Chinese playing ball in China. The endorsement money from that market is 10 times the size of NYC, Chicago, and LA together. In order to capture that market, LBJ needs to win rings.

Therefore, I do believe that his number one priority is winning. Winning will lead to more $$$ from China, more attention in Asia, and more achievements for his legacy.

[Akolades]

is he allowed to purchase the stock now and argue after the fact that he didn’t know where he was going?

I've seen this argument a few times. My first thought was that he already owned them. If this was something that was put into play for the purpose of getting Lebron, who's team was smart enough to figure this loophole out, have bought share in the stock already?

[moocow007]

Unless he tampers, which could land him in jail, he won't be able to make any more money investing while playing on the knicks than he could with any other team. It's really a moot point.

???

Firstly IF he tampers he's most DEFINITELY going to jail.

Secondly, he absolutely can make money MORE MONEY in NY (as pointed out be Ozanian who actually is an expert in these sorts of things...unlike...I'm guessing you are).

But even without this, as has already been said and written by numerous experts in the business world Lebron James CAN make a lot more money playing for the Knicks than he would staying in Cleveland despite the ESPN analysts (who have no clue on matters of business like this) spouting out the "Lebron is global" dribble and that it doesn't matter where he plays nonsense.

[hatnlvr]

Very interesting theory and if we are buying the Billion dollar athlete and it's all about the money then this all makes sense. We still have a month and a half to go before this thing finally plays out but this was definitely an eye opener of a post. Great find ITGM!

[Sever82]

Man I still can't believe what a great great move this was by Dolan or whoever initiated this. IMO this is the biggest Lebron/Knicks related news in the past two years. I'm not sure what type of money we are talking here but if Forbes talks about it it can't be peanuts. Seriously guys, the thing I was worried about was Lebron staying in Cleveland because of that extra year--no matter what type of athlete you are it is always tough to leave 30mill. on the table but this does not seem to be an obstacle anymore as obviously New York seems like the place Lebron can make the most money.

You need to do some research. Another poster posted this but Lebron's networth is around 90-100 Million. If he used half his worth to buy a stake in the Knicks franchise, it would only account for about a 2.5% ownership, just my opinion but that pretty much nothing to jump for joy over.

[BklyntoTNeck]

The best LeBron thread started on this board in a very, very long time.

[kosmovitelli]

For conspiracy theorists, I don't think the spin-off has anything to do with Lebron or the Knicks. The Knicks are just a small part of Dolan's empire. It's just an added bonus for Walsh in his pursuit of Lebron.

As Jimmy Dolan explained last year, the spin-off made a lot of sense business wise :

Dolan said, "This spin-off will create two distinct companies, each with enhanced strategic flexibility, its own defined business focus and clear investment characteristics. The new MSG will be an attractive combination of sports, entertainment and programming properties, while Cablevision will continue to house a portfolio that includes industry-leading telecommunications services and popular programming networks. We believe that the combined value of these assets has not been fully realized, and that this transaction will be beneficial to shareholders as both Cablevision and MSG freely pursue their own individual business plans."

Cablevision is way more profitable and less volatile than MSG. That's the main reason of the spin-off.
MSG's operating income for the first nine months of 2009 : $3.4 million
Cablevision's operating income for the same period : $975.7 million

The Madison Square Garden assets haven't been steadily profitable. They've seesawed with renovations at the arena, a slump in entertainment ticket sales in the recession and the up-and-down fortunes of the Knicks and Rangers. MSG's operating income was $3.4 million in the first nine months of 2009, after a $23.6 million operating loss in the same period of 2008. The company made money in 2007 and lost money in 2006.

In contrast, Cablevision's operating income for its TV, Internet, phone and advertising businesses has been rising steadily for years. In the nine months that ended Sept. 30, operating income was $975.7 million, up 18 percent from the same period the year before.

James Dolan can now guide the company's more profitable units and focus on returning cash to shareholders, said Craig Moffett, an analyst at Sanford C. Bernstein & Co. in New York.

"After the spin, Cablevision becomes a much simpler story to understand, and one that generates a much higher free-cash-flow yield," Moffett said in an interview. "The only question moving forward is what Cablevision is going to do with all its cash."

[BklyntoTNeck]

Man I still can't believe what a great great move this was by Dolan or whoever initiated this. IMO this is the biggest Lebron/Knicks related news in the past two years. I'm not sure what type of money we are talking here but if Forbes talks about it it can't be peanuts. Seriously guys, the thing I was worried about was Lebron staying in Cleveland because of that extra year--no matter what type of athlete you are it is always tough to leave 30mill. on the table but this does not seem to be an obstacle anymore as obviously New York seems like the place Lebron can make the most money.

You need to do some research. Another poster posted this but Lebron's networth is around 90-100 Million. If he used half his worth to buy a stake in the Knicks franchise, it would only account for about a 2.5% ownership, just my opinion but that pretty much nothing to jump for joy over.

No one here cares for your opinion. I'll tell you what would make me jump up for joy....not seeing you post on this board. Beat it.

[willbcocks]

You're referring to this as Ozanian's expert breakdown: "They cannot pay James with MSG stock because it would violate the league's collective bargaining agreement. But there is nothing to stop James from buying shares of MSG with his money. This would allow James to in essence work for himself and capture the upside in revenue from higher ratings on the MSG RSN, a soon-to-be renovated Madison Square Garden and much higher profits he will bring to these platforms." .....?

If there's any complicated economic or legal analysis, I missed it.

I am not a lawyer, but Lebron would put himself at risk if he purchased a lot of MSG stock immediately before signing. The risk would be both legal (insider trading) and PR--this would make him look very cynical and be another punch to his already reeling image.

He could certainly purchase stock after signing. And the stock could make him a lot of money. But there's no reason to suspect it would make him any more money than if he purchased an S&P 500 index fund. The fact that his play could increase the value of the stock is not an advantage exclusive to him -- anyone else can invest in MSG as well. And since investments are speculative, the value of the stock, and the price LBJ would have to pay to purchase it, would increase immediately upon him signing with NY. For Lebron, as for anyone, investing in MSG will carry the same risk/reward as any other stock (unless he pulls a sketchy deal by purchasing stock before signing).

Lebron would be diverting some of his salary/savings into MSG stock if he decides to purchase it. Many average Joes do the same thing, or rather they are forced to do this by the company, which gives them benefits in stock. Companies don't do this because it makes employees richer than giving them cash. If it did, companies would keep the stock themselves. Moreover, they force employees to hold it for a certain number of years or until retirement, precisely because employees might be tempted to sell it as they gain no particular advantage from holding their own company's stock. Companies create these programs because it makes employees invested in the company. They want to work harder and make it succeed.

Lebron could buy stock as a motivational tool, but that's about the only effect I can see coming from this.

Note: I am not saying Lebron would make less money in NY. I think NY would give him lots of endorsement and other opportunities that would allow him to make more money. More money, however, will not come from MSG stock.

[kosmovitelli]

Published: Friday, 14 May 2010 | 4:17 PM ET

Shares of Madison Square Garden Inc., [MSG 21.50 -0.39 (-1.78%) ] the publicly traded owner of the New York Knicks, are up 12 percent since the Boston Celtics began their three-game win streak that knocked the LeBron James-led Cleveland Cavaliers out of the NBA playoffs.

“Investors are hoping that James chooses to come to New York to improve the profitability of the Knicks (ticket sales/suite sales/merchandising/MSG Network ratings, etc.)” wrote Richard Greenfield, media analyst for BTIG, in a note to clients this afternoon. (Click here to see Greenfield’s blog ) “And to help drive the return on investment of the Garden rebuild project.”

MSG shares pulled back a bit today, which may be related to the increase in Vegas odds of the Chicago Bulls’ chances of landing James when he becomes a free agent in July. The Cavaliers are still the favorites to sign him at 8-11, according to online gambling site Bodog.com, but the once-time dark horse Chicago Bulls are now second at 2-1, ahead of the Knicks third with 5-2 odds. At the start of the month, Knicks were the clear second favorite.

http://www.cnbc.com/id/37156496?

[Pharmcat]

can somebody share with me why the clips are a bad choice for lebron?

with kaman, gordon, blake griffin (did people forget about him?) + this years lotto pick?

thats A LOT of talent right there

or is it just the whole kobe owns LA thing?

[moocow007]

can somebody share with me why the clips are a bad choice for lebron?

with kaman, gordon, blake griffin (did people forget about him?) + this years lotto pick?

thats A LOT of talent right there

or is it just the whole kobe owns LA thing?

The two biggest reasons IMHO:

1. Kobe and the Lakers (even after Kobe is gone) will ALWAYS be the "Varsity Team" in LA
2. The Clippers owner is generally considered one of the most miserly owners in the NBA

And with all that "talent" the Clips still ended up being even more disfunctional as a team than the "FA 2010 gutted" Knicks (more talent but same record essentially).

[Wilson Chandlaa]

LBJ does not care about NYC market, or Chicago market for that matter. The guy is the face of the league. His endorsement money is through the roof, even if he plays for the Memphis Grizzlies.

The mother of all market is the 350-400 millions of Chinese playing ball in China. The endorsement money from that market is 10 times the size of NYC, Chicago, and LA together. In order to capture that market, LBJ needs to win rings.

Therefore, I do believe that his number one priority is winning. Winning will lead to more $$$ from China, more attention in Asia, and more achievements for his legacy.

lebron is big because of how good he is u wont realize how much bigger hell be when he comes to ny nd he might never be as good as jordan but he has a chance to be bigger than him

[RHODEY]

http://www.nypost.com/p/sports/knicks/m ... Ub5hBcTkTK

Just to counter the Jordan nonsense...