Wall Street was bullish today … and not for Chicago.
Thanks to all the LeBron-New York speculation, shares Madison Square Garden Inc., the owners of the Knicks, jumped $1.30, or 6.4 percent, to close at $21.57 Wednesday, adding 3 cents in extended trading. Volume was up dramatically at 1.7 million trades, more than five times the daily average of 311,000.
James’ potential arrival in New York would boost the value of the franchise by “hundreds of millions of dollars,” Gabelli & Co. analyst Christopher Marangi told the AP.
If LeBron, who will announce his decision Thursday on ESPN, signs with the Knicks, the team could see about 10 percent more revenue, while the MSG network could get 10 percent more advertising revenue, he said.
“Would landing LeBron add to the economic value of the enterprise? The answer to that is unequivocally yes,” he said. “The second question is what are the Knicks’ chances of actually getting him? The market is saying it thinks better of the chances today than it did yesterday or before the weekend.”
Feuling the speculation of LeBron going to New York was Dwyane Wade and Chris Bosh‘s announcements Wednesday that they would play for the Miami Heat. Marangi said those decisions instantly made Chicago (who agreed to terms of a five-year, $80 million with free agent power forward Carlos Boozer on Wedesday, too) a less-attractive option for James while Miami’s chances of winning the NBA Finals would go up dramatically with all three stars on the team.
But the Knicks entered the free agency shopping spree with the most salary cap room in the league with $34.1 million – enough for two players earning the maximum salary. After the team landed Amar’e Stoudemire for $100 over five years, it still had $17 million to spend on James. [The AP]