For the past couple of days it has been widely speculated that the New York Knicks owner James Dolan will not match the Houston Rockets offer to Jeremy Lin. In probably the funniest (unless you’re a Knicks fan) and most ironic twist in the Lin saga, reports are surfacing that Knicks’ owner James Dolan has lost more money in the Madison Square Garden (MSG) share price drop due to the news, than it would have cost to pay for Lin’s contract in its entirety….
The 64-cent drop in MSG stock equates to a market capitalization loss of about $49 million.
Estimating the cost to MSG of matching the Jeremy Lin contract offer from the Houston Rockets is a bit trickier. The roughly $25 million over three years that the Knicks would owe the Harvard graduate is almost irrelevant, because the Knicks will be paying the NBA’s full salary cap, and then some, with or without Lin. The only real direct cost comes from the luxury-cap implications.
[Source Market Watch]
