Madison Square Garden Stock Jumps More Than 10% After NBA Labor Pact
NEW YORK - Shares of Madison Square Garden Co. rose more than 10 percent in early Monday trading following an agreement in the NBA labor dispute.
The stock of MSG was up more than 11 percent in early trading before closing up 10.1 percent at $28.37. That gave the company, which is controlled by the Dolan family, a market value of $2.1 billion.
Miller Tabak analyst David Joyce early Monday upgraded his rating on MSG from "neutral" to "buy" and lifted his shorter-term price target to $30 from $27, citing the apparent end of the labor dispute.
And Morgan Stanley analyst Benjamin Swinburne, in a report entitled "Game On," wrote that "the likely end of the NBA lockout is an incremental positive for MSG shares - both in terms of near-term earnings and the removal of a major overhang."
The benefit of the proposed 66 game season versus his prior assumption of 50 games "should have a modest positive impact on earnings per share," he added.
Swinburne also commented on the NY Knicks, which MSG owns. "The new deal brings harsher luxury tax penalties, which should help to limit the payrolls of high-revenue teams such as the Knicks," he said.
A labor agreement unveiled this weekend is tentative and still needs approvals, but would get the season started on Dec. 25.