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In the latest proof that “Lin-mania” surrounding the rapid rise of Jeremy Lin as a star on the New York Knicks basketball team is only gaining strength, the MSG Network reported Wednesday that the last two telecasts of the team are the highest rated since the network began tracking household ratings at the start of the 1988-89 NBA season.
The Friday game scored a 7.3 Nielsen rating (540,788 households) and Monday pulled a 7.34 (542,265 households).
To put that in perspective, the game last Friday was the third-highest rated program in the New York market among all shows that aired at that time. The telecasts on Friday and Monday both outperformed the average rating of every local network broadcast.
This means through the first seven games on MSG – a regional broadcaster serving the largest U.S. media market — in which Lin has been a starter, the Knicks’s average household rating has increased 138 percent compared to the prior 20 games. Lin’s presence has also meant a 82 percent increase in the average season to date household rating compared to the first 27 games last season.
Those games were also among the first to air in the New York market on Time Warner Cable, following a deal made to renew carriage of MSG’s channels. The two sides had been at odds, and Knicks games had not been on the cable outlet since the end of December, as they were at odds over the amount of an increase in the price Time Warner pays for the carriage.
With pressure from government leaders as well as fans, Time Warner made the deal. While no figures have been released, it is believed they paid more than they wanted because the demand to see Lin play was so intense.
ABC/ESPN, which carries NBA games nationally, carried a recent Sunday game in which the Knicks played the league champion Dallas Mavericks, racking up ABC’s third-highest ratings for a regular season game (not played Christmas day) since 2002.
Adidas, the official clothing sponsor of the NBA, rushed to bring out a whole line of jerseys, T-shirts and other products, at prices up to $90 per item; while other retailers printed the Lin name on blank shirts and souvenirs to meet the demand. Thousands of Lin related items are being sold on eBay and elsewhere.
Lin’s success has put the Knicks’s on the fast track to possibly make the NBA playoffs for the first time in years and has already greatly enriched the team and its owners through greatly increased merchandise and ticket sales and more – and that is only the start for the team, it’s owners and for Lin.
While he will only make the NBA minimum salary of $762,195 this season, a little over $9,000 game – Lin is positioned to become a lucrative licensing and merchandising phenomena that can last years, as long as his career continues to soar.
“He has had an enormous impact,” says Brian Swallow, senior vp, strategy and business development, for Fanatics Inc., an online sports merchandise seller that runs the official store of the NBA, as well as online stores for the NFL, MLB and others.
Swallow says since the 23-year-old Asian American arrived in early February, 60 percent of all Knicks-related sales of jerseys, T-shirts and other items has been related to Lin. In terms of their entire business for all teams and all sports, Lin currently represents 9 out of the top 20 sellers. On their search engine, Lin and Jeremy Lin are the two most searched terms on their sites. Lin has even become the top seller for Fathead, which markets enlarged images of players and personalities.
“Nothing like this has every happened from a player perspective,” says Swallow. “This is a player on a team that is not a league champion and it’s a hot market related to only that player.”
On social media, including Twitter in the U.S. and in Asia, interest in Lin has soared. Time Magazine even put Lin on the cover of its Asia edition last week.
“From a merchants point of view or from a sports fans point of view,” adds Swallow, “nobody can remember anything like this where somebody came out of nowhere and all of a sudden looks like one of if not the best player in the league.”
“If you look at the short term impact Lin is having on the Knicks alone,” says Patrick Rishe, an assistant professor at Webster University in St. Louis who specializes in sports economics, “I’m speculating that by the end of this season his impact could mean anywhere from $10 million to $20 million (for the Knicks).”
Rishe says that it is not only soaring merchandise sales and increased ticket sales (at higher prices) but also “the fact prior to this resurgence the Knicks had a lot of no-shows who now are actually showing up. This means you’re getting concessions and parking and other facility revenue you otherwise would not get.”
If the Knicks make the playoffs because of Lin, which is a real possibility, Rishe points out that would mean income from extra games both on site and on TV.
The higher ratings since Lin arrived will also translate into higher ad revenues, although that may take a while. “It depends on how many of those ads had already been sold,” explains Rishe. “But there is no question that next season this will have an even greater impact.”
These benefits also spill over to the NBA, which Rishe says has already made deals to show more games in Asia – especially Taiwan and China – and by next year will make even bigger deals.
“Long-term next year the Knicks revenue cold be an additional $25 million to $50 million than they would have been without Lin,” says Rishe.
He estimates the impact on the NBA’s revenue which is about $4 billion for a full season of games will be one to two percent. “We suspect Lin could be responsible for $40 million to $80 million in higher revenues,” says Rishe. “His impact on the league revenue stream is really quite amazing.”
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.”
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