Madison Square Garden stock falls amid lockout fears

Madison Square Garden has taken a hit in the stock market due to the continued NBA lockout, and could this mean good things for players looking to soften the NBA's hard-line stance?

In a must-read column from Tuesday, SI.com's Sam Amick detailed a slim hope that the NBA's players have regarding a potential rift between NBA owners. More specifically, NBA owners from larger markets that might not be as keen on locking out players as are the owners from smaller markets.

Here's Amick's take on the hope, gleaned from discussions with players and agents, on the Players Association's last hope in trying to come out on the even end of a "billionaires vs. millionaires" fight:

The hoped-for fracture might start with Jerry Buss or Donald Sterling in Los Angeles, or Jerry Reinsdorf in Chicago, or James Dolan in New York. In the eyes of so many players and the folks who represent them, someone from a large market will eventually raise his hand and ask out of this lockout game. This owner would explain how the old system worked just fine for his team and how it's no longer in his best interest to support this cause.

He would be followed by a few more of the fattest cats whose finances are just fine, and then there would be weeping from small- and mid-market owners who have dreamed of a system makeover. The players, who would have missed many months of paychecks by this hypothetical point, would rejoice in that seemingly plausible scenario.

It is definitely a plausible scenario, though we doubt it will take place. Owners like Reinsdorf, Buss and Dolan are set to lose quite a bit of potential money should the lockout result in canceled games, but they're also still taking in their fair share of the pie in terms of national TV revenue that will still find a way into teams' coffers even if ABC, TNT and ESPN don't televise a single game this season.

Also, these big-market owners knew they were heading into this lockout destined to lose, as the NBA tries to even out its revenue-sharing system and make it so smaller-market teams have an easier chance to compete with their big-market rivals. It's a plausible scenario, but a slim hope.

One crack in the armor? MarketWatch is reporting (via the NBAPA's Twitter account) that the Madison Square Garden corporation has taken a hit in the stock market, as investors worry about the impact of a sustained lockout.

Here's MarketWatch's take:

[MSG Co. was] downgraded to neutral by Bank of America Merrill Lynch, in part because of lost income caused by the work stoppage. "Despite our continued belief in MSG's robust long-term story...we think the shares will be unlikely to outperform over the near-term with $90 million of adjusted operating cash flow at risk from a full-season NBA lockout and a possible LA Forum acquisition on the horizon."

Not only does MSG own the New York Rangers, but it also runs concert events across the country, competing with outfits like Clear Channel and Jam Productions. Fresh off an expensive re-design of Madison Square Garden proper this year, the purchase of the 44-year old Forum in Los Angeles and subsequent re-design, done without the help of (at least) 41 home Knick games and local TV revenues, has investors worrying.

Perhaps James Dolan, in Amick's scenario, will be the first to raise his hand?

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