Could New York Knicks Playoffs And Reopening Of Madison Square Garden Be A Winning Combination?

Pent-up demand for live sporting events and concerts continues to be a theme for investors seeking to find reopening stock plays. Add in a storied NBA franchise ending a playoff drought and investors could have two exciting stocks offering upside through the rest of 2021.

What Happened: For the first time since the 2012-2013 NBA season, the New York Knicks are in the NBA Playoffs. This could be good news for Madison Square Garden Sports MSGS, which owns the team, and Madison Square Garden Entertainment MSGE, which owns the iconic namesake Madison Square Garden Arena.

After hosting only 1,980 fans for home games in the NBA regular season, the New York Nicks will welcome around 15,000 fans for each of its home games in the NBA Playoffs, the most of any NBA team.

The Knicks offered tickets to season ticket holders first on Tuesday, May 18, and saw the tickets for game one and game two sell out shortly after they were available to the public on Thursday, May 20.

TicketIQ reported an average price of $1,453 for Knicks tickets on the secondary market, which is the highest for any NBA Playoffs round outside of the NBA Finals.

This demand could be attributed to the long gap in Knicks playoff history and game one being the most attended indoor gathering in New York since the pandemic began.

These trends play well for both Madison Square Garden Sports and Madison Square Garden Entertainment as long as the Knicks keep advancing in the NBA Playoffs.

Related Link: Madison Square Garden Sports: Buying The Knicks And Getting The Rangers For Free 

Why It’s Important: The New York Knicks are already the most valuable NBA team according to a ranking by Sportico, which valued the team at $5.4 billion. The publicly traded MSGS has a market capitalization of $4.6 billion and an enterprise value of $5.7 billion.

The company also owns the NHL’s New York Rangers and other assets, which could provide upside on a sum of the parts valuation.

Shares of Madison Square Garden Sports are up 4% year to date and could have room to run as the Knicks compete in the playoffs. The team lost game one 107-105 and the first-round matchup is predicted by many to go seven games, which could mean four home games for the Knicks.

Madison Square Garden Entertainment shares are down 14% year to date and up 21% over the last 52 weeks. Shares could be in for a rally with the large number of fans welcomed back for NBA games and the slow reopening of major concerts across the country.

Madison Square Garden has a 2021 calendar that includes stops by Billy Joel, Genesis, Dan + Shay, Harry Styles and Luke Combs.

Photo credit: Jean-Baptiste Bellet, via Wikimedia Commons