Who's Profiting From Jeremy Lin and 'Linsanity'
His impact on the wealth of Cablevision founder Charles Dolan and family is already amazing. The Dolan’s collectively own about 59% of publicly traded Madison Square Garden (which was spun off from Cablevision two years ago).
After Lin joined the Knicks starting line up Feb. 4, shares of MSG appreciated through Feb. 20 by 13 percent to an all time high of over $33 a share. Whether that is all Lin-related or not, it adds up to an increase of nearly $250 million in market cap – worth about $146 million to the Dolans.
Rishe says Lin-mania, and rising revenues, will also increase the value of the Knicks franchise overall. Forbes had valued the Knicks franchise (including real estate and activities beyond sports) at $655 million in January, up from the $300 million the Dolan’s paid to acquire the operations in 1997.
“The Dolan’s ought to be kissing the ground Jeremy Lin walks on,” jokes Harold Vogel of Vogel Capital Management in New York, who is author of the book Entertainment Industry Economics: A Guide for Financial Analysts.
“This is phenomenal,” says Vogel. “The guy came out of nowhere to become a big star. The Knicks see the benefit of it in terms of the overall interest in their games, which was practically nil among the population here in the last couple years.”
“Lin’s contribution from a psychological point of view has been enormous,” adds Vogel. “From a financial standpoint, obviously retail stores are doing tremendous business with t-shirt and paraphernalia sales way up; cable and TV viewership is tremendous; and that is translating into higher ad rates.
On top of the 13 percent increase I the stock price already, Vogel thinks Lin-mania could be worth another 10 percent increase.
Vogel gives Lin a lot of credit for the way he has handled the attention, which adds to his belief he could last. “He comes across as straight forward, not arrogant,” says Vogel. “he is likable, and has a tremendous presence of mind. He’s very smart for somebody 23 years old.”
That presence and personality, along with his talent on the court and his life story, are going to make him especially interesting to brands and sponsors, predicts publicist and pundit Michael Levine.
“His potential is enormous,” says Levine. “His image and persona is exactly the opposite of the current one (for NBA players) which allows him to differentiate himself, which of course is part of the secret sauce of success.”
Levine says add into that Lin being the “right person in the right place at the right time.”
By that he means Lin comes across as someone sponsors can see as perfect symbols of their products and services. “The typical athlete in the NBA is not a Harvard graduate,” says Levine, “not Asian and not religious. So that means he can bring forward three pieces that are contrasted with the current image and that is very appealing to marketers.”
Lin is managed by Roger Montgomery, who runs a boutique sports management firm from San Francisco. Sources say Montgomery has been inundated in a few weeks with over 1,000 offers and expressions of interest in Lin for a wide range of deals. Montgomery did not return calls or emails seeking comment.
Rather than rush to make deals, Montgomery has taken a pause to figure out what to do. In an interview on CNBC, Montgomery says that what has happened is “unprecedented,” and says: “What were going to do is take our time. Were not going to rush out of the gate and try and accomplish the world in one weeks time.”
“We want to make sure were going through the opportunities that are aligned with Jeremy, with who he is, with what his story is all about, and make sure they resonate with him, not put him in a position where he is torn because the engine is basketball and the New York Knicks,” added Montgomery on CNBC. “The biggest endorsement he has to date is being starting guard for the New York Knicks.”
His biggest outside endorsement to date has been with Nike, which signed Lin two years ago when he was playing for the Golden State Warriors in his hometown of San Francisco.
Nike too is taking a cautious approach to rolling out the Lin bandwagon, at least to date. Brian Strong, a spokesman for Nike, says they have a Lin t-shirt hitting the market and will soon follow with Lin branded athletic shoes. It is expected to be a shoe in the Knicks colors of blue and orange with the word Lin on the back heel.
Lin was among a group of athletes who during the past off-season were part of a digital shoot for Nike. That video is being used online by Nike as a promotion.
Lin also made a trip for Nike during the off-season including a visit to two cities in Taiwan where he gave basketball clinics to young people.
On Wednesday , the Beijing Business Today publication reported that Nike had extended its contract with Lin, a deal that originally reportedly ran three years but was for limited purposes. Estimates are the new deal will pay Lin between $2 million and $4 million a year. Nike is expected to use Lin as a centerpiece of its marketing in both the U.S. and China, second only to LeBron James, who is a long established star.
Other deals will likely take longer. Montgomery had worked out an agreement with Richard Abate, a well-known book agent who works for the management firm 3 Arts in New York to feel out a book deal for Lin. After it leaked to the press, amid tremendous publicity, the book deal was pulled back.
On Feb. 18, Abate said in a statement: "Earlier this month, Mr. Lin's representatives asked me to arrange meetings to explore the possibility of a book deal. As the frenzy surrounding Mr. Lin has escalated, his representatives wisely decided to postpone those meetings until they can approach the development of a book project with the thoughtful consideration it deserves. Mr. Lin's representatives are not entertaining book offers at this time so I'm not currently acting on their behalf.”
There are also reports that Montgomery has been approached by other sports representation firms about helping handled the many opportunities. On Wednesday, the Hollywood Reporter learned that Montgomery has had talks with IMG, the big sports rep firm, about helping handle Lin. A spokesperson for IMG declined to comment but would not deny the report.
Whatever happens is likely to be well publicized if only because Lin plays in New York. “That puts it on a different scale,” says Vogel. “I’m not saying it couldn’t happen in L.A. or maybe Chicago, but the media focus in New York City is more intense on all sports activities than probably anywhere else.”