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Analyst: Knicks could be worth $3 billion

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The New York Knicks could be worth up to $3 billion, according to Albert Fried & Company.

The research company announced it revised Madison Square Garden’s price target Friday, making its stock price worth nearly $85 per share.

Analyst Rich Tullo wrote that he believes the Knicks are now worth between $1.4 billion and $3 billion after the revision was made. The value is based on percent premiums of recent sales prices paid for franchises such as the Los Angeles Clippers at $2 billion, the Milwaukee Bucks at $550 million and New Orleans Pelicans at $338 million.

Former Microsoft CEO Steve Ballmer bought the Clippers from the Sterling family for a record $2 billion after Forbes magazine valued the team at $545 million.

“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,” Tullo wrote. “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.”

Tullo estimated that the Knicks generated twice as much money in tickets sales that the Clippers did last season. The Knicks sold more than $100 million in ticket sales. The Knicks also receive 100 percent of the money they make off suites, some leasing at $1.8 million a year.

ESPN.com reported that the Clippers make no more than 10 percent of suite sales because of their lease with Staples Center, which is owned by AEG.

Tullo wrote that he believes Madison Square Garden is worth $2 billion to $3 billion and that the land alone would be worth that amount if the Knicks moved.

Also, the New York Rangers’ playoff run to the Stanley Cup Finals helped raise MSG’s fourth-quarter revenue from $267 million to $339 million.

Up to the minute news and reports from the news wire of The Sports Xchange.

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