If the New York Knicks were placed on the auction block, the franchise could reportedly fetch up to $3 billion thanks to the rising interest in sports teams.
Darren Rovell of ESPN passed along details about the valuation from Albert Fried & Company analyst Rich Tullo. He noted the recent sale of the Los Angeles Clippers for $2 billion, well above previous estimates, was excessive but also a sign of the times. He also references the value of the Knicks' venue, Madison Square Garden:
While much of the Clippers premium is excessive in our view, we think the bid does suggest the market for iconic sports franchises is robust. We argue despite the recent sale value, intrinsically the New York Knicks as part of MSG are worth at least 50 percent more than the Clippers because MSG operates a regional sports network and owns its arena.
The report also noted the low end for the Knicks would now be around $1.4 billion.
It's a key number because Forbes listed the New York franchise as the most valuable in the NBA back in January with a $1.4 billion price tag. The Los Angeles Lakers were close behind at $1.35 billion, with the Chicago Bulls third at $1 billion.
The business magazine noted increased revenue led to the league-leading projected value:
A second round playoff run and higher revenue from the $1 billion renovation of Madison Square Garden pushed the Knicks' operating income to $96 million last season, the highest in the history of the NBA. The team also boasted the second largest average TV audience per game (230,000), behind only the Los Angeles Lakers. Both the Knicks and MSG Network are owned by the publicly traded Madison Square Garden Company.
So Forbes listed the team at $1.4 billion while taking into account the rising income, and the total is still less than half of the new projected ceiling for the franchise's worth.
Although that shows the prices being paid for sports franchises may be a bit steep, the people with enough money to make such a purchase probably aren't overly concerned. If they want to become an owner, they'll pay what it takes.
The Knicks are an iconic brand, which would certainly seem to make them more coveted should they hypothetically end up for sale. But just because the Clippers went for $2 billion doesn't mean the Knicks are guaranteed to fetch a certain percentage more.
Of course, for most people the valuation is more of an interesting tidbit than window shopping.
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